- It would take effect from 1 September to 31 December 2020.
- Stamp duty cut by the Maharashtra government serves as an incentive to revive demand in the realty sector.
- The move could help boost the affordable home sales.
The Maharashtra government last week reduced stamp duty on the real estate sector to boost demand. The government stated that the 3% stamp duty cut in the realty sector would take effect from 1 September to 31 December 2020, while a 2% cut in stamp duty will be effective from January 2021 to March 2021.
Before now, the government charged 5% in stamp duty in popular cities like Pune, Mumbai, Nagpur, and Nashik, while stamp duty charges were 6% in other cities.
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Stamp duty reduction may help boost affordable home sales
The Maharashtra government’s plan to reduce stamp duty on real estate to recuperate the sector that has been battered by the present pandemic is expected to increase the number of affordable homes the most.
According to analysts, given that lots of developers have rolled out or plan to roll out a variety of discounts, the government’s stamp duty move will likely encourage more people to buy houses.
Anuj Puri, chairman, Anarock Property Consultants, said:
“The reduction is technically like an instant flat discount on the property’s cost. A 2-3% reduction is significant if we consider the usual ticket size of a property purchase in a hyper-expensive city such as Mumbai.”
The state levy stamp duty. It is charged upon registering a document with the state registrar, and this is after the transaction is agreed upon by the two individuals involved.
Ramesh Nair, CEO & Country Head (India), JLL noted:
“The phased reduction in the stamp duty rates from the present 5% in Mumbai and Pune to 2% (until December 2020) and 3% (January – March 2021) is a much-awaited measure from the Government of Maharashtra as the residential real estate markets in these top two cities are reeling under pressure”
“The rest of Maharashtra will also benefit from a reduction in stamp duty. Undoubtedly, this will augur well for prospective home buyers as it is expected to result in direct financial savings for them. It will act as an attractive incentive towards fastening the time taken for several deal closures in the current market environment. Though temporary, this is a strong inoculation into the dampened market sentiment and will help in reviving sales.”
Upon registering for a property, stamp duty is charged on the transaction value. For people who want to own a home, low-interest on home loans or credit-linked subsidies offered by the government could incentivise them to own a property.
Home-buyers are now eligible to get more benefits. It is essential to know that a residential asset is a one-time investment. The present offering by the Maharashtra government will provide more opportunity to make a home purchase at a significant price value and provide liquidity at hand.