How can buyers take advantage of the reduced Stamp duty rates in Maharashtra?
Farshid Cooper, MD, Spenta Corporation, tells you how
In a major policy decision that will act as a massive stimulus for the state’s weakened real estate sector, the Maharashtra government recently decided to cut the Stamp Duty charges while registering a property in the state. The stamp duty on sale deed documents made between September 1 and December 31 2020, will be reduced to 2 percent from the previous 5% and further, between January 1 and March 31 2021, the stamp duty will be levied at 3% The decision is likely to provide much-needed impetus to the realty sector that has been adversely affected since the beginning of the pandemic.
Stamp duty is a percentage of the property value that buyers must pay to the state government in order to get properties registered in their names. Additionally, 1% of the property value up to a maximum of Rs. 30,000/- must be paid as a registration charges. These transactional costs in addition to GST, significantly increase the total outlay made by the purchaser and often act a deterrent to make buying decisions. Thus, reduction in stamp duty rates can bring down these transactional costs albeit for a limited period
With low interest on home loans, credit-linked subsidies offered by the central government under the PMAY scheme, it could be the right time for home buyers to buy a property. The affordable and mid-segment residential market is now accompanied by rationalised pricing and developers offering lucrative schemes, this makes it an ideal time to make viable property transactions.
Although COVID-19 has impacted the real estate sector in a negative way, it has also ironically led to many fence sitters to close property deals, this is primarily because there are fewer buyers chasing the same number of available flats. Measures like these that have been adopted by the state government could further supplement the SOP’s provided by the central government through schemes such as the RBI moratorium, reduction in repo rate, and loan facilities etc.
This announcement also comes at the heels of the country’s festive season and will help the sector improve its sales volume and velocity for the existing inventory available in the city. Homebuyers should consider buying properties in Maharashtra now.