Mumbai: The real estate industry in Maharashtra is dismayed over reports that the government plans to hike stamp duty rate by 1%, at a time when sales in categories other than luxury housing have become tepid.
The report also comes at a time when inventory levels in Mumbai have touched a high of almost three years.
"Hike in stamp duty charges will discomfort the buyers," says Niranjan Hiranandani
Dr. Niranjan Hiranandani, Managing Director, Hiranandani Group, said: “Revision of ready reckoner rates along with the hike in stamp duty charges is an indisputable sentimental dampener. This will discomfort affordable home buyers who are already under pressure due to spiralling home loan interest rates and inflation-led rise in property prices. Any further increase in rates in absence of fiscal stimulus will lead to high cost of credit and development. Whereas, demand for mid- and luxury homes will garner traction in the coming quarters as the desire to upgrade with branded developers in holistic ecosystem gains velocity post pandemic quandary.”
Industry leaders planning to meet government ministers
The industry representatives are contemplating meeting government ministers, including Chief Minister Eknath Shinde, to get a clarity on the report as well as to request against the hike in stamp duty rate and other reliefs.
“After the pandemic, we had a strong recovery in the real estate sector, thanks to favourable government policies supported by developer discounts and attractive payment plans. Now, the decision of charging metro cess of 1% will crumble the budget of prospective home buyers, who will in turn delay their purchase,” said Amit Jain, Chairman and Managing Director, Arkade Group.
Industry players believe there already are signs of slowdown in developed economies and the government should support the real estate sector to overcome challenges in Mumbai and Maharashtra.
Realtors seeking consession from the government
For the past six months, realtors are seeking reliefs from the government, including concession in stamp duty similar to the one rolled out during the pandemic.
“If the state waives off half of stamp duty, we developers are willing to provide the balance 3% relief to the home buyers. Effectively, it will be nil stamp duty for the end consumers. This will support in increasing sale momentum for the existing housing stock inventory,” Sandeep Runwal, President, NAREDCO Maharashtra, and Managing Director of Runwal Group had said last October.
During the pandemic, the government had reduced stamp duty to 2% from September to December 2020 and 3% between January and March 2021 in order to revive economic activity. The same was restored to 5% from April 2021 and increased 1% a year later on account of metro cess.
