A raft of transactions for commercial and residential properties were finalised in the Mumbai registration and stamp duty department after it reopened for business on May 18. But the revenue numbers went down slightly in August as most homebuyers were in the wait and watch mode, hoping that the government would cut the stamp duty rate.
On August 26, the Maharashtra government decided to temporarily reduce stamp duty on housing units from 5 percent to 2 percent until December 31, 2020 to boost the stagnant real estate market hit by COVID-19. Stamp duty from Jan 1, 2021, until March 31, 2021, will be 3 percent.
Mumbai suburban in the month of August saw a fall in the revenue from registration compared to its July collection. In August, the revenue from stamp duty and registration of property and other documents stood at Rs 162.91 crore. This when compared to the July revenue was slightly down from Rs 188.41 crore.
A total of 17,917 documents were registered with the office of stamp duty and registration in Mumbai suburbs in August. The number stood at 15,816 in July 2020.
In Mumbai city too, the revenue from stamp duty and registration of property and other documents stood at Rs 211.76 crore in the month of August. This was lower than July that had seen a revenue collection of Rs 242 crore.
Read More: Maharashtra government slashes stamp duty to 2% until Dec 2020 to boost demand
The numbers are likely to go up after the Pitru Paksh period ends and the festival season sets in, say local property agents.
Pitru Paksh set in on September 1 and ends on September 17.
The Pitru Paksh period marks a dull phase in terms of real estate transactions. Instances of sale and leasing properties are minimal during this period, say property agents. The age-old belief among Hindus is that the Pitru Paksh days, devoted to ancestors, are considered inauspicious to buy new things or start a venture.
Property agents say that several homebuyers who were to register their property documents in August held on to their decision hoping that stamp duty rate cuts would be announced by the government. “Buyers were in a wait and watch mode,” they said, adding a Rs 3 lakh saving on stamp duty is substantial.
Read More: Mumbai property market gets it mojo back after coronavirus lockdown
After the stamp duty department after it reopened for business on May 18 post the COVID-19 induced lockdown, at least 1,642 documents such as agreements of sale, mortgages and tenancy as well as sale deeds valued at Rs 176 crore were registered in May and June, according to data shared by the stamp duty department of Mumbai.
Though many of these agreements were simply waiting to be signed after the registration and stamp duty department reopened, the pace of deals signals a recovery in the Mumbai real estate market.
Compare the May and June deals with the transactions before the lockdown. Up to 4,073 documents were registered and Rs 194 crore collected in March before the lockdown. In April, when the lockdown set in, there were zero registrations, an unprecedented event in Mumbai, India’s financial hub and India’s richest municipality.
Roughly 20 residential transactions registered in June were valued at more than Rs 10 crore, brokers in the know told Moneycontrol.
In housing, the number of registrations bounced back by 33 percent with 1,250 transactions in June. In value terms, these sales are worth roughly Rs 1,920 crore, said people familiar with the matter.
The Mumbai registration and stamp duty department also amassed Rs 2,581 crore in 2019-2020 compared with the targeted Rs 2,630 crore for both commercial and residential properties.
In March, the Maharashtra government had announced that it was reducing stamp duty on properties by 1 percent (from 6 percent) for Mumbai, MMRDA Region and Pune for two years.