Prestige Estates Calls Out Against Property Registration Fees Hike in Karnataka

Prestige Estates Projects, one of India’s top real estate developers, has strongly criticised the Karnataka government’s recent move to increase property registration fees. As per publicly available information, the Chairman and Managing Director of Prestige Group has called the hike “unfair” to homebuyers, especially during a time when the sector is already facing multiple challenges.

What Has Changed?

The Karnataka government has doubled the property registration fee from 1% to 2%, effective August 31, 2025. As a result, the total transaction cost for homebuyers has gone up from 6.6% to 7.6%. This means that for a ₹1 crore property, the additional cost of property registration will now be ₹1 lakh.

This increase comes at a time when property registrations have already slowed down due to issues like the ongoing e-khata implementation, which has affected documentation and property approvals.

Impact of Property Registration Fee Hike on the Real Estate Sector

Despite the 1% surge in the property registration fee hike in Karnataka, the real estate market remains strong. There are several factors supporting the sector, including:

• Continued growth in the IT sector.
• Rising demand for office space from Global Capability Centres (GCCs) in cities like Bengaluru, Pune, Hyderabad, and Chennai.
• Ongoing job creation in tech and related sectors.

However, if property prices rise beyond affordability, the market could slow down. Currently, positive economic growth and strong buyer sentiment are keeping the sector stable.

Call for GST Input Tax Credit

In addition to raising concerns over the property registration fee hike in Karnataka, real estate developers have appealed to the government to reinstate the GST input tax credit in the upcoming GST Council meeting. They argue that the removal of this credit has increased development costs by around 18%, placing added financial pressure on both developers and homebuyers. 

Prestige Estates Share Price Performance 

Despite the fee hike, investors seem to remain confident in Prestige Estates Projects. The company’s stock rose by 1.42%, closing at ₹1,584 on the NSE. Over the past six months, the stock has gained over 33%, though it remains down 11.6% over the past year.

Read more: Reliance Eyes ₹1 Trillion FMCG Revenue to Challenge HUL and ITC.

Conclusion

The hike in property registration fees may be a setback for homebuyers, but Prestige Estates remains confident in the market’s strength. With a stable economy and rising demand in key sectors, the company believes that the real estate sector can weather the storm. All eyes are now on the GST Council meeting, which could bring much-needed relief for developers and buyers alike.  

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.