The lower stamp duty effectively reduces the cost of acquisition for a real estate unit and improves homebuyer sentiment with increased property registrations.
The Maharashtra government slashing the stamp duty in August 2020 led to the monthly registrations hitting 10,000/month consistently.
Real estate body CREDAI MCHI (Maharashtra Chamber of Housing Industry) is asking for an extension of the stamp duty cut in Maharashtra by one year, till 31st March 2022. The government of Maharashtra had cut the stamp duty charges while registering a property in the state. In August 2020, the state government had decided to slash the stamp duty on sale deed documents registered between September 1 and December 31, 2020, by 3 per cent. The relaxation was to continue with the 2 per cent cut from January 1 to March 31, 2021.
“The Maharashtra government slashing the stamp duty in August 2020 led to the monthly registrations hitting 10,000/month consistently. The lower stamp duty effectively reduces the cost of acquisition for a real estate unit. Extending the prevailing lower stamp duty for at least a year will improve homebuyer sentiment and increased property registrations. It will entice homebuyers to invest, revenue for the state government and help reduce inventory level for the developers, so a win-win for all stakeholders,” says Krish Raveshia, CEO at Azlo Realty
Stamp duty is levied by the states and is charged while registering a document with the state registrar, which is generally a transaction document agreed upon by two or more parties. In most cases, it is a fixed percentage of the agreed value as mentioned in the agreement.
“Maharashtra government has always set an example for other states to follow, be it setting up MahaRERA or slashing stamp duty, other states have taken cues from us. Providing support to the real estate sector is critical given the sheer size, employment it creates, and its interconnected structure. Over 250 allied industries are dependent on real estate for demand and business,” adds Raveshia.
In the case of property registration, stamp duty is charged on the transaction value or circle rate whichever is higher. The Circle Rate is the minimum price of the property, as set by the government. In order to boost the sentiments, sometimes the government reduce the circle rate while at times the stamp duty is cut.