MC Explainer: 5 things homebuyers should know about Maharashtra’s 50% stamp duty concession for township projects

According to the Maharashtra government's definition, an Integrated Township Project can come up where there is a suitable area of 40 hectares or 100 acres at one place. (Photo: Mehul R Thakkar)

In a move that is expected to bring cheer to homebuyers, the Maharashtra government has announced a 50 percent concession on stamp duty for buyers purchasing a house in integrated township projects (ITP). The concession is expected to bring down the price of apartments in Maharashtra where the current stamp duty is in the range of six to seven percent.

According to the Maharashtra government order, the 50 percent stamp duty will be valid for projects that are notified Integrated Township Projects or where the 'in-principle approval’ has been issued by the concerned collector or the competent planning authority. The concession will not be given to homebuyers who have paid the stamp duty before the issuance of the order by Maharashtra government on June 20.

Here are five things homebuyers wishing to avail themselves of this concession must keep in mind.

1) What is a township project?

According to the Maharashtra government's definition, an Integrated Township Project can come up where there is a suitable area of 40 hectares or 100 acres at one place.

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Mehul R Thakkar

Special Correspondent|Moneycontrol

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The area shall be a contiguous, unbroken and uninterrupted one. Where there are divisions caused by one or more water courses (such as nalas or canals), existing or proposed roads of any width or by the railways, the plot shall be treated as one, contiguous, unbroken land. Further, access to the plot should have an existing minimum road width or a proposed road width of 12 meters.

2) Concession is not applicable in Mumbai:

The 50 percent stamp duty concession will not be applicable in Mumbai.

In this context, the order issued by the revenue department of the Maharashtra government reads, "The remission or reduction in stamp duty under this Order shall not be applicable to the property or unit located in the Integrated Township Project areas of Municipal Corporation of Greater Mumbai, other planning authorities or special planning authorities or development authorities within the limit of Municipal Corporation of Greater Mumbai, MIDC, Jawaharlal Nehru Port Trust, Hill Station Municipal Councils, Eco-sensitive or Eco-fragile region notified by Ministry of Environment, Forest and Climate Change (MoEF and CC) and Lonavala Municipal Council in Maharashtra except Navi Mumbai Airport Influence Notified Area (NAINA).

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3) 50 percent stamp duty concession is on first transaction only:

According to the order, the stamp duty concession of 50 percent will be applicable for the first transaction made by the developer to the first homebuyer, and not for resale transactions.

The order reads, "The concession is applicable for “the first instrument of transaction” means, the first document executed between ‘the project proponent/s’ and ‘the purchaser’ (hereinafter referred to as ‘the original purchaser’) Thus, further transaction from the original purchaser to the next purchaser is not eligible for the remission or concession in the stamp duty under this order."

4) Stamp duty concession is applicable for land purchase by developer:

The Maharashtra government has said that remission of stamp duty is also applicable for developers of township projects at the time of purchase of land from the landowners.

"The remission or reduction in stamp duty under this Order is applicable only once either for the project proponent of the said ITP for the purchase of land from the land owner or for the instrument of transaction of agreement to sell or conveyance of any unit under any user in the notified ITP only from the project Proponent/s of the said notified ITP to the Purchaser of that unit," the order says.

Also read: 6 things you need to know about proposed deregistration of 88 real estate projects in Maharashtra

5) 100 percent stamp duty will be levied in case of violations:

According to Maharashtra government order, the homebuyers or developers will be liable to pay the entire 100 percent stamp duty in case there is a violation of the conditions or of the regulations of the integrated township project. "Any project proponent/s or purchaser of any unit under any user or any subsidiary company of any project proponent/s for which the remission or reduction in the stamp duty is granted under this order, and which fails to fulfil the purpose or objectives of the said policy or commits breach of any of the conditions or special regulations as specified, shall be liable to pay the whole stamp duty and penalty," the order reads.