The government may be able to cover for revenue loss from lower stamp duty and registration charges by way of increased sales, expected to be highest in the affordable and mid-income segments, according to a report by ANAROCK Property Consultants.
There are nearly 33,500 ready-to-move-in homes in MMR and Pune collectively with MMR having around 18,500 units and Pune around 15,000 units. As many as 55,750 units are slated to be ready by March 2021 in both cities – 32,850 units in MMR and 22,900 units in Pune.
To boost the stagnant real estate market hit by COVID-19, the Maharashtra government on August 26 decided to temporarily reduce stamp duty on housing units from 5 percent to 2 percent until December 31, 2020.
Stamp duty from January 1, 2021, until March 31, 2021, will be 3 percent, they said. The decision was taken at the state cabinet meeting on August 26.
Also Read: Maharashtra government slashes stamp duty to 2% until Dec 2020 to boost demand
The reduced stamp duty charges are good news for buyers and developers as well as the state government. With no GST applicable on them, ready-to-move-in homes are the most compelling option for homebuyers in MMR and Pune in light of the Maharashtra Government’s limited-period stamp duty cut.
"The combination of GST exemption, reduced stamp duty and the lowest home loan interest rates in almost two decades are a strong argument now favouring ready-to-move-in homes. If we additionally factor in the ongoing incentives being offered by developers, buyers in the state focused on zero wait /instant gratification homes are at a distinct advantage,” said Prashant Thakur," director and head - Research, ANAROCK Property Consultants.
In the under-construction category, properties due to be completed in the next 6-7 months are the next best bet. While these are not exempt from GST, they are invariably priced 5-10 percent lower than their ready-to-move-in counterparts.
Another 55,750 units are expected to be completed in MMR and Pune by March 2021 – the time when reduced stamp duty rates revert to normal. Of this total supply, MMR has 32,850 under-construction units while Pune has 22,900 units.
Also Read: Will Maharashtra's 50% cut in stamp duty boost housing demand?
Of the total 33,500 ready homes in MMR and Pune currently, nearly 44 percent are in the affordable category priced less than Rs 40 lakh, followed by 26 percent in the mid-segment priced between Rs 40 lakh to Rs 80 lakh, 19 percent in Rs 80 lakh to Rs 1.5 crore price bracket, and the remaining 11 percent in the luxury segment priced over Rs 1.5 crore.
In MMR, out of the total 18,500 ready homes, approximately 46 percent are in the affordable segment, followed by 18 percent in the mid-segment, 18 percent in Rs 80 lakh to Rs 1.5 crore price bracket and the remaining 18 percent in the luxury segment.
In Pune, out of the total 15,000 ready units, 42 percent are in the affordable category, followed by 36 percent in the mid-segment between, 20 percent in Rs 80 lakh to Rs 1.5 crore price bracket and just 3 percent in the luxury segment.