It would come into force from September 1 to December 31, 2020.
The reduction in stamp duty by the Government of Maharashtra serves as an incentive to stimulate demand in the real estate sector.
The move could help to boost affordable home sales.
The Government of Maharashtra last week lowered the stamp duty on the real estate sector to stimulate demand. The government stated that the 3% stamp duty reduction in the real estate sector will be effective from September 1 to December 31, 2020, while a 2% stamp duty reduction will be effective from January 2021 to March 2021.
So far, the government has levied a 5% stamp tax in popular cities such as Pune, Mumbai, Nagpur and Nashik, while the stamp tax in other cities was 6%.
Lowering the stamp tax can help to boost the sale of affordable homes
The Government of Maharashtra’s plan to reduce stamp duty on real estate to save the sector hit by the current pandemic is expected to increase the number of affordable homes the most.
According to analysts, the government’s move to lower stamp duty is likely to encourage more people to buy homes, given that many developers have introduced or plan to introduce a variety of discounts.
Anuj Puri, chairman of Anarock Property Consultants, said
“The discount is technically like an immediate flat-rate discount on the cost of the property. A discount of 2-3% is considerable considering the usual size of the ticket to buy a property in an extremely expensive city like Mumbai.
The state levies a stamp duty. It is levied when a document is registered with the state registrar, after the transaction is agreed between the two parties involved.
Ramesh Nair, CEO & Country Manager (India), noted JLL:
“The phased reduction of stamp duty rates from the current 5% in Mumbai and Pune to 2% (by December 2020) and 3% (January – March 2021) is a long-awaited measure by the Government of Maharashtra as the residential property markets in these two top cities come under pressure”.
“The rest of Maharashtra will also benefit from a reduction in stamp duty. This is undoubtedly a good omen for potential home buyers, as it should lead to direct financial savings for them. It will be an attractive incentive to reduce the time needed to make several deals in the current market environment. If only temporary, this is a strong vaccination against the subdued market sentiment and will help to revive sales”.
When a property is registered, a stamp duty is levied on the transaction value. For people who want to own a home, low interest rates on housing loans or credit-linked subsidies offered by the government could provide an incentive to own a property.
Home buyers are now entitled to more discounts. It is important to know that home ownership is a one-time investment. The current offer from the Government of Maharashtra will provide more opportunities to buy a home at a significant value for money and will provide the available liquidity.