TN government's stamp duty hike affects affordability and accessibility of housing

“The recent announcements by the TN Government have impacted home buyers puttinga strain on the affordability and accessibility of housing.On 8^th of July, the State Government passed a new order increasing Stamp duty charges from a fixed amount to 1% of the market value of the property, while registration charges for construction agreements have increased from 1% to 3% effective immediately from 10th July 2023. This has compromised the affordability of new homes, impacting the state's vision of "Homes for All”, said Mr S Sivagurunathan, President, CREDAI Chennai.

The Real Estate sector in Tamil Nadu plays a vital role in the state's economy, contributing to 23% of its GDP. It is projected that the Real Estate sector will touch USD 1 trillion by 2030 and contributes 13% to the country's GDP by 2025.

 “It is essential to ensure alignment with current market conditions and fair valuation. Reducing the charges to a nominal level will alleviate the financial burden on home buyers, promote the redevelopment of apartments, and encourage new home buyers to invest in properties” stated Mr S Sridharan, Vice President, CREDAI National South Zone.

“The cost of registering the powers of attorney will increase significantly, leading to higher selling prices for buildings and putting additional financial pressure on home buyers, especially those from the middle-class and lower-middle-class segments,” said Mr A. N. Balaji, Chairman, Builders Association of India. “This escalation places an unreasonable burden on the common man without providing any value addition for the use of Power of Attorney,” pointed out Mr G. Mohan – President, Chennai Southern Builders Association.

“The Real Estate industry is already facing challenges due to demonetization effects, the impact of COVID-19, and the rise in guideline value. This announcement further adds to the existing difficulties and may lead to a decreased demand for properties,” commented Mr N Hanifa, President, Singara Chennai Builders Association.

Other Association members also present on the occasion were Mr K KThirumalai, President, Flat Promoters Association, Ambattur and Avadi, Mr D Chirstinpaul, President, Chennai Flat Promoters Association, North and Mr H. Robert Livingston, President, Flat Promoters Association, Chennai South.