Maharashtra government decides not to extend stamp duty waiver on property registrations

On August 26, the state government decided to temporarily reduce stamp duty on housing units from 5 percent to 2 percent until December 31, 2020. Stamp duty from Jan 1, 2021, until March 31, 2021, was at 3 percent.

On the occasion of Women’s Day, the Maharashtra government announced a 1 percent cut on stamp duty charges if the transfer of house property or registration of sale deed is in the name of a woman.

The real estate sector expressed disappointment over the government's decision not to extend the stamp duty waiver.

"We are disappointed with the Maharashtra government’s decision to not extend the stamp duty rebate beyond 31st March. Given the current economic climate, the reduction in stamp duty charges not just galvanized homebuyers' sentiments but also enabled the industry to spearhead the state’s economic revival in the post-Covid era as well.

"An extension would have ensured the sustenance of the sales momentum while providing the necessary support to one of the strongest economic pillars and employment generators in the country," said Deepak Goradia, president, Credai MCHI.

"We look forward to continuing our dialogue and representation with the necessary authorities to resume the reduced 3% stamp duty rates in the near future and safeguard the best interests of all stakeholders involved," he added.

Commenting on the state government’s decisions, Niranjan Hiranandani - MD- Hiranandani Group and national president, NAREDCO, said that, "Maharashtra government has played a leadership role in rolling out revolutionary measures like stamp duty reduction to augment sluggish real estate market sales during the pandemic.

"An extension would have helped keep up the pace of sales volumes and maintain momentum in property registrations across micro markets and different housing segments in the state…Keeping ready reckoner rates unchanged is good, but the industry expected a reduction in ready reckoner rates to boost real estate transactions. Naredco requests the state government to reconsider its decision.”

"Bringing down the RR rate at this juncture would have definitely aided the real estate market as it was something that all stakeholders were looking forward to. A cut in RR rates would have given more room to developers to bring down the prices. Today in few of the micro-markets, the RR rate is almost at par with the ongoing market price," said Anuj Puri, Chairman - ANAROCK Property Consultants.

Over the last five to six years, the gap between the market value and RR rates reduced considerably in Mumbai. For instance, in Lower Parel the difference between the two rates is just 6%, followed by Worli with 8% and Jogeshwari East with a 12% difference, he said.

However, the move to give 1% rebate to women homebuyers is good because women are emerging as major target audience today. The growing dominance of women homebuyers has been an ongoing phenomenon over the last few years, especially in urban centres. And the cut as such may encourage more women to come forward and register a property in their name, Puri said.

Interestingly, in ANAROCK’s recent consumer sentiment survey, 62% of women respondents confirmed housing as their preferred asset class over the other options - stock market, fixed deposits and gold.

The second wave of coronavirus pandemic notwithstanding, property registrations in Mumbai have swelled to 17,091 as the unprecedented rush among the homebuyers continued in the backdrop of all-time low home loan rates, attractive price discounts and reduction in stamp duty charges.

Real estate experts said that the number by end of day registrations may touch 18,500 which is almost 95 percent of the sales registrations in December 2020.

According to data available on the website of department of registration and stamps, 19,600 properties were registered in MMR in December 2020; the number touched 10,442 in January 2021 when stamp duty was at the rate of 3%; February witnessed 10,198 registrations and there were 17,091 properties registered until March 30, 2021.

Last week, real estate developers had urged the government of Maharashtra to extend the prevailing stamp duty rebate that expires on March 31, 2021 by a year, saying that the move had improved homebuyer sentiment and increased property registrations.