The government of Maharashtra has reduced the stamp duty on property registrations to 2% for transactions between September 1 and December 31 from current 5%. The stamp duty will be 3% for agreements to be registered between January 1 and March-end.
The move, apart from supporting the state exchequer, is expected to support the revival of sluggish real estate market in the state including Mumbai, the country’s most expensive property market.
Realty developers expect the reduction in stamp duty charges coupled with the festive offers and other incentives to push sales activity.
“The move will benefit the homebuyers and foster demand creation along with giving a stimulus to the allied industries coupled with employment generation. Whenever there has been a reduction in the stamp duty in the past, it has only driven an increase in revenue in the government treasury,” said Jaxay Shah, Chairman, CREDAI National.
Following the announcement of lockdown in March, the Maharashtra government had decided to keep ready reckoner rates unchanged for the current financial year in the backdrop of the pandemic.
When asked about any probable losses the state may incur due to the reduction in stamp duty, a government official said that these would be notional.“Under the current economic situation very few people are actually buying property. The real estate sector is going through some tough times and we hope that this may give a spurt to people buying property,” he said.
Property registration activity in Mumbai had picked up in July bouncing back from the activity witnessed in April-June quarter. While collections from real estate activities were seen improving, it still remained below the pre-Covid19 level.
The stamp duty collections stood at Rs 242 crore in July as against Rs 169 crore in June and Rs 470 crore in February prior to the outbreak of the virus and subsequent lockdowns, the government data had shown.
Experts are of view that the timing could not have been better as the home loan rates are also lowest that could boost the conversion of demand into sales.
“This move will benefit ready-to-move-in apartments the most as OC ready projects do not attract GST and the reduction in stamp duty will now bring down the transaction cost for such apartments to a very negligible percentage,” said Ram Naik, executive director, The Guardians Real Estate Advisory.
According to him, the reduced borrowing cost, negligible transaction cost and developers willing to offer lucrative prices, is expected to create a good opportunity for serious consumers to make a purchase.
(Source: Economic Times)