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Maha mulls 1% rise in stamp duty on immovable property transactions

SANJAY JOG | Thu, 20 Jul 2017-07:45am, DNA

The bill is expected to move in the ensuing monsoon session of the state legislature beginning July 24.

 

Maharashtra government proposes 1% rise in stamp duty over and above the existing 5% in the form of acess or a surcharge on all transactions of immovable properties across the state. The government hopes to mop up additional Rs 500 crore in the current fiscal. The bill is expected to move in the ensuing monsoon session of the state legislature beginning July 24.

Revenue department officer told DNA,” The government is seriously mulling this option by amending the Maharashtra Stamps Act, 1958. This is one of the options being considered to mobilize additional resources especially after the government has announced a Rs 40,000 crore crop loan waiver scheme and the subsequent 30% cut in the budgetary spending.” He informed that the government had collected Rs 28,000 crore through stamp duty and registration fee in 2016-17.

However, Gulam Zia, executive director, Knight Frank said any additional cost of transaction by increasing stamp duties would only deter the prospective buyer further when real estate transaction were dwindling. ”Further, with the focus on the Prime Minister’s vision of “Housing For All by 2022″, affordable housing may have to be insulated from any such shock of increased stamp duties. In such a scenario almost 70% of future market that comprises of affordable housing may not fall under this dragnet, once again raising serious concerns over effective collection of revenue from a small section of the industry,” he noted.

Niranjan Hiranandani, Founder-President, National Real Estate Development Council (NAREDCO – Maharashtra) observed that the government’s move will result in disappointing sentiments and will impact micro-markets across Mumbai & Mumbai Metropolitan Region. Many intending home buyers may end up becoming a ‘fence sitter’ again. ”From the perspective of the industry, cost of buying land will increase post the hike, which in turn will impact price-points of real estate in Mumbai. I hope we see a repeat of the situation in October 2015, when a similar proposal had been made – but did not get implemented,” he said.

Manju Yagnik, Vice Chairperson of Nahar Group hinted that buyers will be hit the hardest as the taxation has already been increased with an approximate percent of 3 to 5. “The real estate industry will also face the impact due to increase in stamp duty. With demonetization and the vision Modi government has for a cashless system, this step will not be favorable to support the same vision,” she opined.

Ramesh Nair, CEO & Country Head, JLL India said that increased stamp duty definitely does nothing positive for middle-class buyer sentiment, but it is not a deal breaker. ”That said, the Government should consider waiving or rationalizing stamp duty on affordable housing, as long as the beneficiaries and parameters under which home loans disbursed for the purchase of such housing are clearly defined and adhered to. The onus on making its dream for Housing for All by 2022 is clearly on the Government, and it will need to take consummate steps to make it a reality,” he added.

Maha mulls 1% rise in stamp duty on immovable property transactions

Publication / Article Source: DNA

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