The Uttar Pradesh government’s recent mandate, requiring homebuyers to pay a 6% stamp duty along with a 1% registration fee at the early stages of property deals, has raised concerns across the real estate sector.
Aimed at improving transparency and reducing fraud, the policy requires builder-buyer agreements to be registered upon payment of 10% of the property’s cost. However, this change places an added financial burden on prospective buyers, particularly in high-demand regions like Noida and Greater Noida, where many middle-income families are seeking affordable housing options. The increased upfront costs may discourage a significant portion of buyers, potentially reducing demand in these already competitive markets. Industry insiders suggest that many buyers, previously attracted by lower initial payments, could now look to neighbouring states, such as Haryana or Maharashtra, where registration norms are more lenient.
Furthermore, the lack of clear guidelines on refund policies for cancellations could deter buyers further, with concerns over the loss of the 1% registration fee and 6% stamp duty in case of changes. Developers, too, are feeling the impact. With additional compliance costs and the early requirement for registration, projects may face delays as developers adjust to the new regulations. Increased operational costs could affect affordability, potentially driving up property prices in an already inflated market. While the intent behind the policy is to enhance legal transparency and protect buyers, its implementation raises questions about affordability and accessibility. For this regulation to truly benefit both homebuyers and developers, a more balanced approach is needed, with clearer refund mechanisms and reduced financial burdens on potential buyers.
