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The real estate market in Rajasthan, particularly Jaipur, has been witnessing a significant increase in housing plot sales. Factors such as the desire for homeownership, a more favourable stamp duty structure, and the Covid pandemic's impact on financiers have contributed to this surge. However, industry experts caution that unchecked plotting may result in disorganized urban growth, calling for long-term planning and consideration of potential consequences.
Over the past two years, land prices in Jaipur have soared, with local real estate professionals estimating a 70% increase in areas such as Jagatpura and other parts of the city. Homeownership remains a strong motivator, but the stamp duty structure has played a substantial role in this surge. In addition to these factors, changes in lending practices and a preference for less congested living areas have fuelled demand for plots. While this growth in plot sales has been substantial, developers warn that it may lead to chaotic city expansion if left unchecked.
The disparity in levies for plots and flats is striking. Dhirendra Madan, president of Credai-Rajasthan, explained, "The stamp duty, fees, and tax component on flats amounts to about 23% of the cost, while the same for a plot could be about 3%. This significant difference is a key factor in the rapid growth of plot sales."
Madan further elaborated that property developers pay stamp duty when purchasing land and that an individual buying a flat faces an additional 8.8% stamp duty. With the inclusion of the 5% GST, the total levy reaches 23%, much higher than for a plot. In contrast, first-time buyers of plots from colonizers are exempt from stamp duty, with patta charges typically not exceeding 3%. Madan strongly advocates for the removal of this double taxation on flat purchases, which would create a more balanced market for both flats and plots.
However, reduced stamp duty is not the sole reason for the increased demand for plots. Manoj Agarwal, a colonizer involved in plot sales, noted that the Covid pandemic has led to financiers shifting from lending to investing in land due to difficulties in recouping loans. This shift has contributed to the rising land prices, reflecting a changing market dynamic.
Moreover, Agarwal highlighted that as the city becomes more crowded, people are seeking homes in less congested outer areas. This preference for more spacious living arrangements has driven demand for plots, adding to the overall growth in sales. With urban populations continually increasing, the desire for more breathing room in residential areas is likely to persist.
In conclusion, the booming housing plot sales in Rajasthan are driven by a combination of factors, including homeownership desires, a more advantageous stamp duty structure, the Covid pandemic's impact on financiers, and increasing urban congestion. While this trend is currently benefiting the real estate market, it is essential for city planners and developers to consider the potential long-term consequences of unchecked plotting and chaotic urban growth. By addressing these concerns, authorities can create a sustainable and balanced real estate market that accommodates the needs and preferences of residents while ensuring orderly urban development.
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