Developers feel the government’s failure to extend its rebate could possibly halt the healthy pace of property transactions since the waiver was announced.
The Maharashtra government’s decision to not extend its stamp duty waiver on property purchases has left developers disappointed. From April 1 onwards, the government said, buyers would have to revert to paying 5 percent in stamp duty for property registrations.
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Developers feel the government’s failure to extend its rebate could possibly halt the healthy pace of property transactions since the waiver was announced. “We are disappointed with the Maharashtra government’s decision to not extend the stamp duty rebate beyond March 31,” said Deepak Goradia, President of CREDAI MCHI.
“Given the current economic climate, the reduction in stamp duty charges not just galvanized homebuyer sentiments but also enabled the industry to spearhead the state’s economic revival in the post-COVID era as well,” he said.
Goradia said that CREDAI was keen on engaging with the government to bring back the waiver: “We look forward to continuing our dialogue and representation with the necessary authorities to resume to the reduced 3 percent stamp duty rates in the near future and safeguard the best interests of all stakeholders involved.”
In August last year, the Maharashtra government announced that it would cut stamp duty from 5 percent to 2 percent for all property registrations up to December 31, 2020. Registrations between January 1 and March 31, 2021 would be subject to a duty of 3 percent, which in effect meant that a 2 percent waiver would still apply.
Some developers feel that the government may have missed out on an opportunity by not extending the 2 percent waiver beyond March 31. “The extension of this bolster benefit would have played a catalytic role in keeping the pace of sales and property registration momentum up high across the micro markets and different housing segments,” said Niranjan Hiranandani, MD of the Hiranandani Group and President, NAREDCO.
“The data clearly reflects uptick in volume leading to increased state revenue in the second half of FY 21, and multiplier effect it has on employment and GDP,” Hiranandani added. NAREDCO has appealed to the government to reconsider its decision.
Registrations on overdrive
Since the government introduced the stamp duty waiver, property registrations in Maharashtra have been in overdrive. December accounted for 19,600 registrations, while January and February 2021 accounted for 10,442 and 10,198 registrations, respectively.
March registrations as of March 30, 2021 stood at a whopping 17,091. This means between December 1, 2020 and March 31, 2021 Maharashtra accounted for 57,331 registrations that piggybacked on the government’s stamp duty waiver.
Although the rollback on the stamp duty waiver may have disappointed developers and prospective buyers, the government’s decision to leave ready reckoner rates (more commonly referred to as ‘circle rates’ or ‘guideline values’) unchanged has brought the industry some relief.
The Maharashtra government has also decided to extend its 1 percent stamp duty rebate to women property-buyers, which it announced on Internationals Women’s Day, to property registrations in FY22 as well.