Bengaluru’s real estate market witnesses a buyer-friendly shift today as the Karnataka government rolls out new tiered stamp duty rates for property sales, effective October 1, 2023. Properties valued up to ₹20 lakh now attract just 2% stamp duty, 3% for ₹21-45 lakh slabs, and 5% above ₹45 lakh, all calculated on the higher of market value or revised guidance values. This replaces the earlier flat 5% structure plus cess and surcharge, offering significant savings for affordable housing segments amid rising guidance values.
Shift from Flat to Slab Rates
Previously, property conveyances under Article 20 of the Karnataka Stamp Act, 1957, carried a uniform 5% stamp duty on values exceeding basic thresholds, plus 10% cess and 2% urban surcharge, pushing effective costs to around 5.6%. The new slabs ease the burden on smaller deals— a ₹15 lakh flat in Electronic City now costs 2% (₹3 lakh stamp duty base) versus prior flat rates, a 60% relative drop. Higher-end properties over ₹45 lakh see no rate cut but face elevated absolute outlays from today’s parallel 25-30% average guidance value hike across Bengaluru circles.
| Property Value Slab | New Stamp Duty (Oct 1, 2023) | Effective Rate (incl. Cess + Surcharge) | Prior Flat Rate Equivalent |
|---|---|---|---|
| Up to ₹20 lakh | 2% | ~2.2% | ~5% |
| ₹21-45 lakh | 3% | ~3.3% | ~5% |
| Above ₹45 lakh | 5% | ~5.6% | 5% |
Guidance Value Revisions Amplify Impact
Coinciding with the tiered rates, Karnataka resets guidance values—the government’s minimum property valuation benchmark—up by 5-20% for apartments, up to 30% for sites, and 50% for some agricultural land in Bengaluru zones. Premium areas like Indiranagar and Koramangala report 40-50% jumps, inflating stamp duty bases despite slab relief. Registration fees hold steady at 1% today, keeping total transaction costs at 3.2-6.6%.
Legislative Backdrop and Market Outlook
These changes stem from ongoing amendments to the Karnataka Stamp Act, with tiered rates notified prospectively for today’s implementation, ahead of the full Karnataka Stamp (Amendment) Bill passage expected later in 2023. The move supports Bengaluru’s booming residential sales—Q2 2023 already logged 15-year highs—by aiding first-time buyers in suburbs like Whitefield and Yelahanka. Developers welcome the affordability push, though luxury segments brace for higher upfront costs; transactions may pause briefly for recalibration. Buyers should verify sub-registrar rates via igr.karnataka.gov.in before deals.
Bengaluru Property Buyers Get Tiered Stamp Duty Relief from October 1, 2023 added by admin on
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