Maharashtra Cuts Stamp Duty On Property Registrations By 3%
At a time when housing sales have hit a record low because of the Coronavirus pandemic, the Maharashtra government has announced a sharp reduction in stamp duty on property registrations. The move is likely to increase the earnings of the state's Revenue Department that has seen property registrations numbers touch historic a low, following the COVID-19 induced lockdown.
After a cabinet meeting on August 26, 2020, the state has decided to reduce the stamp duty on property registrations by three per cent till December 31, 2020. After this period, the stamp duty reduction from the present level will be two per cent, between January 1, 2021 and March 31, 2021. As this is reduction is available to buyers only for a limited period, builders expect home-buying to pick up during the upcoming festive season.
Recall here that the state has slashed the stamp duty by one per cent in March 2020, amid dwindling housing sales numbers. However, before that move could bring about any positive changes, the Coronavirus pandemic made matters worse.
Data available with Makaan.com show builders in Mumbai sold a total of 4,559 units between April and June 2020. On the other hand, India’s financial capital currently has an inventory consisting of 2,76,492 units. At the current sales velocity, builders in this market would take an estimated 40 months to sell off this stock.
The stamp duty move might make that happen faster.
"The decision augurs well for the revival of the 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. Coupled with the festive season, we expect demand to pick up significantly, which will provide a huge respite not only to home buyers but also to developers who have been suffering amid low demand and limited cash flow availability due to COVID-19," says Nayan Shah, president, CREDAI-MCHI.
"With home loan rates at a decade low, the move to lower stamp duty will benefit the consumers to buy their dream home. The real estate industry is happy and thankful that the state government is taking proactive steps to review the economy and the sector," says Bhushan Nemlekar, Director, Sumit Woods.