Stamp Duty Increases To 6% In Mumbai
In a move that will make real estate transactions more expensive in Mumbai, stamp duty in the city has been increased to six per cent on all property transactions. The new rates will be applicable from February 8.
It was in November last year that the Municipal Corporation Act was passed in the Maharashtra Legislative Assembly to levy one per cent additional surcharge on stamp duty on property transactions. The state government had published the draft of the Mumbai Municipal Corporation (Second Amendment) Act, 2018, and had inserted Section 144 F to levy the new surcharge on certain property transactions. These would include sale, leasing and gifting of property.
This would mean a property worth Rs 1 crore will attract another tax component worth Rs 1 lakh. Earlier, a buyer used to pay Rs 5 lakh as a stamp duty and Rs 30,000 as registration charges for a flat Rs 1 crore.
In 2017, the Brihanmumbai Municipal Corporation had proposed to levy the surcharge on all property transactions in Mumbai apart from stamp duty and registration cost in the Budget of 2017-18.
Property market experts are considering it as a drastic step which will further impact the sentiments of property investors.
The move is particularly discouraging for the mid-segment homebuyers who are considering real estate investment due to easy availability of options and soft interest rates currently.
Impact on Mumbai property market
Property in Mumbai is exorbitantly priced and most of the demand is moving towards Navi Mumbai and Thane. Now, those who are upgrading from the suburbs to the Island City will be the ones who would be most affected. If the surcharge is imposed, homebuyers will move to Thane and Navi Mumbai for their housing needs more actively.