Maharashtra: ‘1 per cent stamp duty cut likely to push up property sales’

MUMBAI: In his maiden budget on Friday, finance minister Ajit Pawar announced 1% concession for the next two years in stamp duty and registration of documents to 5% from 6%. The concession will be applicable in Mumbai Metropolitan Region and civic corporation areas of Pune, Pimpri-Chinchwad and Nagpur.
The decision, which will result in a Rs 1,800 crore decline in revenue for the state government, comes on the back of an increase in revenue collection from stamp duty and registration.
While the government had set a target of Rs 27,000 crore for 2019-20, it managed to collect Rs 29,500 crore—a jump of Rs 2,500 crore. The increase is despite the slowdown in real estate.
Pawar said the cut would encourage citizens to buy property and the government may collect more revenue through increase in sales.
Niranjan Hiranandani, president, NAREDCO, said this would effectively result in 4% stamp duty and 1% Metro cess. “Any cost reduction is welcome, though the industry bodies had sought a 50% reduction. This move will positively impact home buyer sentiment. I appreciate the concern shown by the state government to help home buyers as also the real estate Industry,” said Hiranandani.
The developer said the shortfall in state revenue should be recovered via alternative avenues as also the impact of expected multiplier sales.
Nayan Shah, president, Confederation of Real Estate Developers Association of India-Maharashtra Chamber of Housing Industry, said though the reduction was marginal, it was a welcome decision. “It will benefit the middle-class segment in buying properties and even boost sales,” he said.
Sunit Gupta, an expert in property valuation, said the reduction is a mild benefit and is unlikely to boost sales.
“Between 2003-13, prices of properties have shot up 10 times while incomes have grown two to three times. How many people earn enough to buy a Rs 1.5-Rs 2 crore property?” Gupta said the government must appoint contractors and build affordable housing to bring down prices and boost sales.