In a major relief to push redevelopment of old buildings in Mumbai, the Maharashtra government in a circular has said that a housing society that undergoes redevelopment need not pay stamp duty on the allotted permanent alternate accommodation (PAA) as part of the project.
This means the stamp duty will not be payable while registering the development agreement between the developer and the housing society. The move is expected to bring down project costs and make redevelopment projects more viable for developers.
Following the order, homeowners who get new apartments will have to pay only Rs 100 as nominal stamp duty, while development agreement between the developer and the housing society will be charged as per the value of the transaction.
Further, redevelopment of several old buildings in the Mumbai Metropolitan Region (MMR) is expected to get a boost along with other tier-2 cities like Pune and Nagpur, where redevelopment is picking up pace.
The prevalent stamp duty varies between five percent and seven percent of the total agreement value, depending on the city and district. Currently, stamp duty for those purchasing apartments under the Pradhan Mantri Aawas Yojana―the Union government’s affordable housing scheme―is Rs 1,000.
Earlier, on July 14, the Maharashtra government had announced that registered cooperative housing societies that opt for self-redevelopment will have to pay only Rs 1,000 as stamp duty for allotment of apartments in the newly constructed building to existing flat owners. In June 2023, the state government had announced a 50 percent concession on stamp duty for homebuyers purchasing a house in integrated township projects.
Also read: How a Rs 1,000 stamp duty slash can cut self-redevelopment cost by 7% in Maharashtra
Developers welcome move
"This move by the Maharashtra government…will be of immense benefit to redevelopment projects. Mumbai MMR is home to a large number of old housing societies with buildings in dilapidated condition awaiting redevelopment. This welcome move will now expedite the process and encourage other societies in need of redevelopment to take the next step," said Dhaval Ajmerad, director, Ajmera Realty and Infra India Ltd.
He added, "Overall, this is a positive step taken by the government that will be beneficial for both tenants and developments. As an outcome, the process of redevelopment will get cheaper and faster, benefiting many housing societies in Mumbai MMR and enabling a quality lifestyle for many."
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