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Stamp duty collections in Mumbai back to pre-COVID-19 levels; Rs 420 crore collected in June 2021

As many as 7,850 properties were registered in June 2021 compared to 5,640 units registered in June 2019, clearly indicating a growth of 39 percent.

Despite the Maharashtra government deciding not to extend the stamp duty waiver on property registrations in March this year, the collections in the month of June 2021 stood at Rs 420 crore which was at 93 percent levels of June 2019 when Rs 450 crore was collected by the exchequer, an analysis by Propstack has indicated.

This data clearly indicates that homebuyers are gradually trickling back into the market as vaccination picks up and the second wave appears to be waning.

In May 2021, Rs 268 crore worth of stamp duty was collected due to the onset of the second wave. This was almost half of the collections in May 2019 (Rs 534 crore), the analysis said.

In April 2021, the stamp duty collections were 12 percent higher than April 2019. The total collections stood at Rs 514 crore in 2021 compared to Rs 460 crore in 2019. The 2020 numbers are not being considered as there was a complete lockdown due to COVID-19.

“Stamp duty collection data indicates that the demand for housing despite the stamp duty cut reversal in the month of April continues to hold up and seems even better than pre-COVID 2019. This goes to show that even though the number of buyers that signed on the dotted line significantly increased during August 2020 to March 2021, the demand for housing is gradually reviving as the second wave subsides as more people realise the importance of owning a home,” said Sandeep Reddy, co-founder, Propstack.

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As for the number of properties registered, as many as 7850 properties were registered in the Mumbai BMC region in June 2021 compared to 5640 in June 2019, clearly indicating a growth of 39 percent, the analysis showed.

These registration numbers include the property transactions in Mumbai for which stamp duty was paid before March 2021 when the stamp duty cut ended. Propstack estimates that after adjusting for such transactions, June 2021 had around 5,200 sale transactions.

The Maharashtra 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, had a window of four months until July 31, 2021, from the respective date of payment of stamp duty for registering their apartment.

As many as 5,360 properties were registered in the month of May 2021 which was a 15 percent reduction compared to registrations in May 2019 when as many as 6,270 properties were registered, the analysis said.

Mumbai BMC region that includes Churchgate to Dahisar and Colaba to Mulund, recorded property registrations of 5,360 units in May 2021 which was down 47 percent from April 2021 on account of the second wave of the pandemic and 15 percent from to 6,270 units registered two years ago in May 2019.

In the month of April 2021, as many as 10,136 properties were registered in the region.

As for the actual value of property sold basis the stamp duty, there is an increase of almost 34 percent in April 2021 compared to April 2019 and an 11 percent increase in June 2021 versus June 2019. The stamp duty was at 6 percent in 2019 and is charged at 5 percent currently.

In June 2021, properties worth around Rs 8,400 crore were sold compared to Rs 7,542 crore in June 2019, which is an increase of 11 percent. In May 2021, properties worth Rs 5,360 crore were sold compared to Rs 8,899 crore in 2019, a decline of almost 40 percent, the analysis said.

In April 2021, properties worth Rs 10,286 crore were sold compared to Rs 7667 crore in 2019, a decline of almost 34 percent.

On August 26, the Maharashtra government had 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, to March 31, 2021, was at 3 percent.

Real estate developers, however, said that the property registration and stamp duty revenue numbers have marginally increased in June. “This is largely due to the spillover effect from previous months. The overall momentum has definitely been affected due to the decision to not extend the stamp duty rebate. The second wave has also played a part in subdued homebuyer sentiment,” said Deepak Goradia, president, CREDAI MCHI.

Vandana Ramnani
Vandana Ramnani
first published: Jun 30, 2021 07:59 pm