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COVID-19 second wave: Only 7% of Mumbai property registrations in April were new sales

Up to 93 percent of 10,136 registrations were from property deals closed between December 2020 and March 2021.

A month after the Maharashtra government decided not to extend the stamp duty waiver, just about seven percent of total property registrations in April 2021 were new sales for the month primarily due to the second wave of COVID-19 and the ensuing lockdown.

As many as 93 percent of 10,136 registrations were from property deals closed between December 2020 and March 2021, a new report has said.

Also, 6.6 percent of new sales registered in April 2021 were by women homebuyers paying the concessional stamp duty rate of 4 percent, a report by Knight Frank India has said.

Only 7 percent of these registrations were from new residential sales concluded in the same month, while 93 percent of the registrations were from properties transacted between December 2020 and March 2021 for which applicable stamp duties were paid during the lower rate window, it said.

There had been a very sharp pick up in property registrations in Mumbai between September 2020 and March 2021 during the seven months of the concessional stamp duty window. Hence, when the state government reverted to the previous stamp duty regime, sales momentum was expected to moderate post March 31, 2021.

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The Maharashtra state government in December 2020 had given a leeway of four months to homebuyers to register a property after the payment of stamp duty in order to prevent crowding of registration offices.

This ensured that homebuyers who had purchased residences and paid stamp duty on or before March 31, 2021, have maximum window of four months until July 31, 2021, from the respective date of payment of stamp duty for registering their apartment.

Women homebuyers contribute 6.6 percent in new sales in April 2021

On March 8, 2021, to celebrate International Women’s Day, the Maharashtra government announced a 1 percent rebate in stamp duty for women homebuyer effective from April 1, 2021.

As a result, women homebuyers constituted 6.6 percent of new home sales in the month of April 2021 paying a discounted stamp duty rate of 4 percent over their purchase.

Also Read: Over 10,000 Mumbai properties worth Rs 10,275 crore registered in April minus stamp duty waiver

The state government’s collections from stamp duty registered a modest 12 percent increase in April 2021 against that in April 2019, despite a rise of 71 percent in units registered in the same comparable period. This was because 93 percent of registrations in April 2021 were for apartments that were transacted in the preceding four months paying stamp duty rates of 2 percent and 3 percent only but registered now.

The state government revenues from property registrations during the seven months of lower stamp duty window (September 2020 till March 2021) were 66 percent higher than those collected during the preceding eight months of 2020 (January 2020 till August 2020), indicating that reduction in stamp duty rates had been compensated by a sharp rise in sales velocity, thereby leading to higher revenue generation for the government.

The report also said that in April, as many as 53 percent apartments sold were priced below Rs 1 crore and 42 percent were priced between Rs 1 crore and Rs 5 crore.

“The residential real estate sector had shown a healthy bounce back in the last few months backed by reduced stamp duty, contributing greatly to the state’s exchequers. The demand stimulus provided by the state helped the sector inch back providing employment and economic stability. This thereby proved that the stamp duty sop was a masterstroke that kept the sector and indeed the state economy buoyant during the country’s prolonged fight against the pandemic,” said Shishir Baijal, chairman and managing director, Knight Frank India.

In April 2021, as the government withdrew the reduction in stamp duty, coinciding with the second wave of the pandemic resulting in a virtual lockdown, demand and sales of new homes were severely impacted, he added.
Moneycontrol News
first published: May 3, 2021 03:28 pm

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