Realty prices in Pune and Mumbai markets are set to rise with the Maharashtra state government planning to impose Metro cess from April 1 this year. An additional 1% cess will be levied on all property purchased from April 1 in Mumbai, Pune and Nagpur.
This cess is for funding the Metro rail projects and transport-related projects in the state. The 1% Metro cess is expected to augment revenues of the Metro rail services and service the loans, that funded the Metro project.
The cess will take the stamp duty on property registration from 5% to 6% in Mumbai and from 5% to 7% in Pune, Nagpur and Thane.
The Metro cess could have a detrimental impact on the residential market recovery currently underway, Samantak Das, JLL chief economist and head of research, said. “These are clear signs of the demand momentum returning and at a time like this additional cost burden will be felt by the affordable and mid-segment buyers,” he added.
According to property consultant JLL, Mumbai recorded 96% of pre-Covid sales in Q4 2021 while Pune’s sales were 252% of pre-Covid numbers and on an annual basis as well, Mumbai and Pune saw sales improve by 30% and 130% on a year-on-year basis in 2021.
“The state government could have looked at deferring this cess, given the fact that the stamp duty concession is also slated to end by March 31, 2022, for the time being. While the metro cess will be utilised for infrastructure upgradation, the timing could have been pushed further to allow for a sustained recovery to play out in the residential market,” Das said.