Government proposes to abolish transfer fees to contain growth in real prices
Government plans to abolish transfer fees to property buyers to contain growth in real prices. The abolishment of transfer fee will not have any implications for the state exchequer, so states might make a move in favour of the ban.Apnaloan.com Research Bureau
07 Sep 2007
The government plans to abolish transfer fees charged on property buyers at the time of sale. However, the proposed abolishment of transfer fee will not have any implications for the state exchequer, so states might make a move in favour of the ban.
At present, the transfer fee adds to the property developer's profits. The ban on charging a transfer fee to the buyer is expected to bring down the real estate prices for the end user.
The Maharashtra government has already banned the transfer fee. The department of consumer affairs, which has mooted the proposal, is of the view that this charge often leads to artificial escalation in property prices. The fee varies according to the kind of property and its location. Normally, the transfer fee ranges from Rs 100-700 per sq feet in New Delhi.
The proposal to completely abolish this fee is a part of a series of government measures to put a check on the ever-increasing property prices.
As part of this exercise, the urban development ministry had asked state governments to bring down stamp duty in their respective states to 5 per cent. This criterion was made mandatory for states to avail of funding under the Jawaharlal Nehru National Urban Renewal Mission.