House for all: Govt asks states to reduce stamp duty

In a move aimed at providing home to all by 2022, the Centre has asked states to reduce stamp duty. Commenting on the move, Urban Development Minister M Venkaiah Naidu said, “The government is making all efforts to boost the housing finance sector to ensure that the goal of affordable housing for all by 2022 is met. It is the priority of his ministry to provide access to safe and affordable housing to all countrymen.”

To encourage private investment for construction of housing for poor, Naidu said that government is giving a number of financial incentives such as service tax exemption on houses up to 60 square metres. “It includes PPP projects and 100 per cent deduction on profits allowed for affordable housing projects. The Centre has asked the states to reduce stamp duty to facilitate housing for all schemes,” the minister said.

Adding further, Naidu said, “He has written letters to the state governments regarding reduction in the stamp duty as it will be a burden on the people. The states have responded positively on the issue.” Naidu expressed confidence that the real estate sector will pick up as the country’s economy is picking up. The World Bank and Asian Development Bank have also shown interest in the affordable housing scheme, he added.

 “The housing for all mission supports construction of houses upto 30 square metre carpet area with basic civic infrastructure by giving a subsidy on interest rates. Area restriction of 30 square metre has also been relaxed to give flexibility to state governments to plan for good houses,” Naidu said while addressing a summit on finance for housing for all in New Delhi on Wednesday.

The minister informed that to boost demand, beneficiaries of economically weaker section and low income group seeking housing loans from banks, housing finance companies and other such institutions are eligible for an interest subsidy at the rate of 6.5 per cent for 15 years. He added that the credit linked subsidy is given as direct transfer to the loan account of beneficiaries to prevent any leakage.

To meet the target of providing house to all, the government has planned to construct 2.95 crore houses in rural areas under its ambitious Housing for All by 2022 scheme.

The government would have to spend nearly Rs 81,975 crore over construction of the one crore houses in the first three years of the Pradhan Mantri Awaas Yojana-Gramin under which it will provide financial assistance of Rs 1.20 lakh to those living in plain areas and Rs 1.30 lakh to those in “hilly and difficult” areas.