Real Estate stocks jumped up to 7 percent in morning trade on Thursday after the Maharashtra government decided to temporarily reduce stamp duty on housing units from 5 percent to 2 percent until December 31, 2020, sources said.
Stamp duty from Jan 1, 2021, until March 31, 2021, will be 3 percent, they said. The decision was taken at the state cabinet meeting on August 26.
Tracking the momentum, the S&P BSE Realty index rallied more than 3 percent and was also the top sectoral gainer.
The gains in the realty index were powered by a rally in Oberoi Realty (up nearly 7%), Sunteck Realty (up 6%), Godrej Properties (up 6%), and Brigade Enterprises (up 5%).
Also Read: Maharashtra government slashes stamp duty to 2% until Dec 2020 to boost demand
Real estate developers had been asking for a reduction in stamp duty following the lockdown to encourage homebuyers to purchase properties during the pandemic.
“Reduction in stamp duty is a big positive for Mumbai real estate space in difficult times. This relief is over and above the 1% reduction in stamp duty for two years that the government has announced in the budget. This is a positive development for Mumbai based developers like Oberoi Realty and Sunteck realty.” Yash Gupta, Equity Research Associate, Angel Broking.
In Maharashtra, stamp duty charges are 5 percent in key cities like Mumbai, Pune, Nagpur and Nashik and 6 percent in others. A 2-3 percent reduction in rates will result in significant savings for home buyers.