Real estate stamp duty: Maha govt reinstates 5%, industry reacts
The Maharashtra government has decided not to extend the 2% stamp duty waiver on property registrations from April. The government has reinstated its earlier system of 5% stamp duty on property registrations.
The state government had slashed the stamp duty charges to 2% between August and December last year to boost the real estate market, which was facing a slowdown due to Covid-19 and the subsequent lockdown. It was made 3% between January 1 and March 31.
The state government told the media that there would not be any changes in the stamp duty rates announced in September 2020. Stamp duty is one of the three biggest revenue contributors for the Maharashtra government.
Gender imparity. Deputy Chief Minister Ajit Pawar had offered 1% extra relaxation in stamp duty for property registrations by women.
While issuing the order, the state finance department had stated that once the property is purchased in the name of a woman, she cannot sell it for the next 15 years.
If the woman sells it, then 1% of the waived amount along with a heavy fine will be collected from her. So, if a woman buys an immovable property, she will have to pay 4% stamp duty. However, to purchase the same property, a man will have to pay 5% stamp duty from April 1 onwards.
Real estate industry appeals to Maharashtra government to continue reduced stamp duty
Ashok Mohanani, President, NAREDCO Maharashtra:
With over 350% y-o-y jump in property registrations for the month of March, Mumbai saw a huge surge which is very much similar to the robust sales in December 2020, thanks to stamp duty reduction by the Maharashtra government. Close to 18,000 housing units registered in this month indicates that consumers have grabbed the golden opportunity to purchase properties in the last few days as the bank loan interest rates were at an all-time low coupled with attractive property prices and reduced stamp duty benefits. It would have been a great move if the government would have extended the stamp duty benefit for a couple of quarters more to keep the sales momentum going forward. On behalf of NAREDCO and the real estate fraternity, we would sincerely urge the government to reconsider their decision in favour of the real estate sector.
Ram Naik, Executive Director, The Guardians Real Estate Advisory:
We have witnessed record property registrations in the month of March 2021, with numbers at almost the same levels as that of December 2020. The mid-income housing segment has performed extremely well and has apparently contributed the most to the unprecedented numbers. Going forward we see the market entering a phase where it’s velocity will be slightly impacted, after two record breaking quarters thanks to extremely low transaction and borrowing costs. Post April the affordable housing segment is bound to outperform all the other counter categories until and unless the travel restrictions are reinforced.
Pritam Chivukula, Hon Secretary, CREDAI MCHI:
The month of March 2021 has yet again witnessed record property registrations in Mumbai with numbers reaching close to 90% as that of December 2020. The distressed real estate sector due to the impact of the pandemic was revived owing to the stamp duty cut by the state government. The recovery was evidenced as the homebuyers rushed in to buy properties to avail the stamp duty benefit. Other factors such as a hike in household saving rates, all time low home loan rates, developers offering discounts and payment flexibility too helped in the resurgence for real estate demand. But the industry isn't out of the crisis situation yet as we see a rise in the Covid cases and a fear of yet another lockdown in the state. We will continue to urge the government to reconsider their decision and extend the stamp duty benefit further in interest of the homebuyers.