The new norm is for residential units up to Rs 2 crore and will remain enforced until June 30, 2021, the finance ministry said in a statement.
The government has also increased allocation to give subsidy under the Prime Minister Awas Yojana (PMAY-Urban) by Rs 18,000 crore, over and above the Rs 8,000 crore already allocated in the Budget.
Under PMAY, the government gives interest subsidies up front on loans between Rs 2.35 lakh and Rs 2.7 lakh. The ministry said the move would create 78 lakh jobs, and improve production and sale of steel & cement, resulting in a multiplier effect in the economy. FM Nirmala Sitharaman said the lowdown led to a decline in prices of residential units. This has brought down prices in many markets below value of properties according to the prevailing circle rates of the area.
As present, if the sale agreement shows value of a property is more than 10% below the circle rate value, the buyer and seller both have to pay income tax on the differential amount. SBI chairman Dinesh Khara said homebuyers’ tax incentives could potentially unleash a price discovery in the real estate market.