MUMBAI: Property registration activity in Mumbai, the country’s most expensive real estate market, declined in the month of August as homebuyers held their registrations back in anticipation of a possible reduction in stamp duty that was announced by the state government last week.
Last week, the government of Maharashtra reduced the stamp duty on property registrations to 2% for transactions between September 1 and December 31 from current 5%. The stamp duty will be 3% for agreements to be registered between January 1 and March end.
While the announcement was made last week, the possibility of this reduction was being discussed for more than a week prior to that resulting in property buyers postponing their registrations to take advantage of lower outgo.
Realty developers and property consultants expect the reduction in stamp duty charges coupled with the festive offers and other incentives to push sales activity, also helping in increasing stamp duty collection from September.
According to property consultants, the government will be able to cover up for revenue lost in lower stamp duty and registration charges by ways of increased sales in the affordable and mid-income segments during the festive season.
With the total ready inventory in Mumbai and Pune region, the government can potentially earn revenue worth around Rs 656 crore including Rs 471 crore in MMR and Rs 185 crore in Pune at the stamp duty rate of 2%, consultants said.
