Maharashtra government slashes stamp duty to 2% till December to rekindle ailing real estate sector

Mumbai: The ailing real estate has welcomed the Maharashtra government’s decision to reduce the stamp duty to two percent till December saying the move will foster demand creation and give a boost to the allied industries. The state government on Wednesday decided to slash stamp duty on sale deed documents by three percent from 1 September to 31 December, 2020, and by 2 percent from 1 January, 2021 to 31 March 2021. Stamp duty is the transactional tax, collected by the government on property purchases. Stamp duty collection is one of the largest contributor to a state’s revenues. “CREDAI has been pursuing the state governments for reduction in stamp duty since the beginning of lockdown. The move will benefit the customer and foster demand creation along with giving a stimulus to the allied industries coupled with employment generation,” CREDAI National Chairman Jaxay Shah said. He further said that whenever there has been a reduction in the stamp duty in the past, it has only lead to an increase in revenue in the government treasury. NAREDCO National President Niranjan Hiranandani said the move will stimulate the housing demand and help in converting inquiries into the sales closures. “The fiscal advantage should nudge fence-sitters convert into the actual home buyers with rippling effect on 269 allied industries and employment generation leading to economic growth,” he said. Hiranandani added that with many other favorable market conditions, this announcement shall rekindle the ailing real-estate sector and see volume in transactions. He, however, emphasised that if the central government can slash GST rates in an upcoming GST Council meeting, it would act as a shot in the arm. Echoing similar views, CREDAI-MCHI President Nayan Shah said the decision augurs well for the revival of the Mumbai Metropolitan Region’s realty and is a much-needed boost to the ailing sector amid the pandemic. “This coupled with the festive season, we expect demand to pick up significantly which will provide a huge respite not only to homebuyers but also to developers who have been suffering amid low demand and limited cash flow availability due to COVID-19,” he added. NAREDCO West President Rajan Bandelkar said the reduced loan rates and now, the lower stamp duty is a win-win situation for both developers and homebuyers. Property consultant Anarock Chairman Anuj Puri said that part from the obvious homebuyer benefits, the government can generate revenue through increased registrations after the most severe downturn in recent history. “Affordable and mid-segment properties, which are in maximum demand, will see the most traction from such this move,” he added. Another consultant Knight Frank India CMD Shishir Baijal said the move is likely to provide temporary relief to end-users looking for relaxation to complete their impending purchases. JLL CEO & Country Head (India) Ramesh Nair said the move will augur well for prospective homebuyers as it is expected to result in direct financial savings for them. “Though temporary in nature, this is a strong inoculation into the dampened market sentiment and will help in reviving sales. While economic growth is expected to be under pressure in the short term, we definitely see positive synergies for home buyers,” Nair added. The Guardians Real Estate Advisory Executive Director Ram Naik said the move will benefit ready-to-move-in apartments the most as occupation certificates of ready projects do not attract GST and the reduction in stamp duty will now bring down the transaction cost for such apartments to a negligible percentage. Realty player Sunteck Realty Chairman and MD Kamal Khetan said the announcement will accelerate the residential real estate demand and further improve the sales momentum. Poddar Housing MD Rohit Poddar said the announcement at the onset of festivity with Ganesh Chaturthi will influence the homebuyers in buying their dream home at a more affordable price. Shailesh Puranik, managing director of Puranik Builders, said the move will benefit homebuyers as well as boost the real estate sector. KS Legal & Associates Managing Partner Sonam Chandwani said the reduction has come at the right time for homebuyers keeping in mind the festive season.