Karnataka may consider 1% stamp duty hike amid revenue shortfall in property registrations

Facing a significant revenue shortfall from property registrations in the first quarter of FY 2025, the Karnataka government is actively evaluating a 1% hike in stamp duty. This move comes over a decade after the last revision in 2013. Currently, buyers pay a cumulative 6.6% in stamp duty, registration fee, cess, and surcharge. If implemented, the hike would increase the overall cost to 7.6%.

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Chief Minister Siddaramaiah, who also holds the finance portfolio, reviewed the Department of Stamps and Registration's performance in a recent meeting. With revenues falling short by 35%—only ₹4,556 crore collected against the targeted ₹7,000 crore for the quarter ending June 30—the government is under pressure to meet its ambitious ₹28,000 crore annual goal.

Officials suggested that a rise in stamp duty could bridge the gap, though a final decision is pending consensus between the Finance and Stamps & Registration departments. Comparatively, Karnataka maintains a lower stamp duty rate than neighbouring states like Tamil Nadu (11%) and Maharashtra (7%), except Andhra Pradesh.

The shortfall has raised concerns about a broader slowdown in the real estate sector. The revenue decline has also been attributed to technical issues with the Kaveri portal and delays in issuing e-khatas, which have hindered property registrations. Industry observers caution that a duty hike could further deter property buyers, compounding the sector's current challenges.