In a bid to boost the stagnant real estate market in Maharashtra, affected due to the COVID-19, the state government has reportedly decided to reduce stamp duty on housing units from 5 to 2 per cent until December 31, 2020.
Stamp duty from Jan 1, 2021, until March 31, 2021, will be 3 percent, they said. The decision was taken at the state cabinet meeting on August 26.
Real estate developers had been asking for a reduction in stamp duty following the lockdown to encourage homebuyers to purchase properties during the pandemic.
The move will benefit the customer and foster demand creation along with giving a stimulus to the allied industries coupled with employment generation. The stamp duty reductions in the past have led to an increase in revenue in the government treasury.
Industry veterans believe that this is a proactive measure taken by the government and was most needed. It will provide buyers an incentive to buy homes, give them the option to take a decision to buy.
The decision to reduce the stamp duty from 5 to 2 per cent till December 31, 2020 augurs well for the revival of MMR realty and is a much-needed boost to the ailing sector amid the pandemic. The reduced cost of the stamp duty is bound to encourage first-time homebuyers, fence-sitters as well as resale flat buyers to invest in real estate.
State revenue minister Balasaheb Thorat recently indicated a 2 to 3 per cent reduction in stamp duty on property registrations in the state was in the anvil.
With many other favourable market conditions, this announcement shall realign real-estate sector to see volumes in transactions.
In Maharashtra, stamp duty charges are at 5 per cent in key cities like Mumbai, Pune, Nagpur and Nashik and 6 per cent in others. A 2-3 per cent reduction in rates will result in significant savings for home buyers.
To do away with inventory pile-up and cost overruns, many have already topped off discounts with added incentives such as booking amount refunds, statutory fees waivers, cashback schemes, easy payment structuring, and assorted freebies. A stamp duty rate cut could push sales into the green during the festive season.
The Maharashtra government on March 6 had announced that it is reducing stamp duty on properties by 1 per cent for Mumbai, MMRDA Region and Pune for a period of two years.
The scale of the outbreak has given rise to new ways of life and a seamless adaptation to several new norms. Remote working or work from home and virtual interactions have found greater acceptance in the wake of the pandemic. A clear distinction between a pre and post-COVID world is being established even as businesses gradually try to pick up activity in the recent weeks after prolonged lockdown. In the post-COVID era, we foresee a massive mindset shift in how people live and work.