Property buyers in Mumbai will have to shell a little more for registering their purchase.

The Maharashtra Government has simplified the stamp duty structure for sale deed of immovable properties in its budget; in the process hiking rates for buyers.

Properties falling under gram panchayats will now attract a 2 per cent duty on property value. Those areas under municipal councils will have a 4 per cent rate and properties in urban areas including those under municipal corporations will have a 5 per cent duty.

Earlier, stamp duty was paid based on a three-tier slab with a part of the duty being a flat rate, not linked to value. For instance, for a property valued above Rs 5 lakh, the stamp duty was Rs 7,600 plus 5 per cent of the value above Rs 5 lakh. This is now 5 per cent on property value.

Therefore, if you wish to register a Rs 50 lakh property in Mumbai, you will have to pay a stamp duty of Rs 2,50,000 now, instead of Rs 2,32,600 earlier. That's Rs 17,400 more. The effective duty will thus go up from 4.5-4.6 per cent to 5 per cent.

While the hike may not seem too high, seen together with the service tax hike from 10 per cent to 12 per cent (on constructed properties) in the budget and a tax collection at source imposed on sand in Maharashtra, costs of property purchases may rise.

According to Mr Samantak Das, National Head Research at Knight Frank, while this hike will not change the decision to buy a property, it will certainly pinch the buyer.

It is noteworthy that registration of houses in Mumbai has been slowing and was down 13 per cent in February 2012 compared with a year ago.

> vidya@thehindu.co.in

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