Buying a home in Mumbai is likely to get costlier April onwards. The Maharashtra government is all set to hike stamp duty on house registration by 1 per cent from the next financial year.
The government’s two year concession from stamp duty hike ends in March 2022 and the duty will rise by 1 per cent to an effective rate of 6 per cent of the agreement value from the current 5 per cent.
Additionally, stamp duty on gifting of house or property to a close relative will see a massive rise from just ₹200 to ₹1 lakh (considering the property cost of ₹1 crore). The ₹200 stamp duty was base price which will be hiked to 1 per cent of the property value.
The Maharashtra government via a notification on February 8, 2019, had levied additional stamp duty in the form of surcharge, which was to be effective from the same year on instruments of sale, gift and usufructuary mortgage in respect of immovable property situated within the municipal corporation area, wherein urban transport projects are being undertaken. Accordingly, for a city like Mumbai, the stamp duty rate on a conveyance of an immovable property was hiked to 6 per cent from 5 per cent.
However, the government in March 2020, granted a two year concession effective from April 2020 for houses registered within the Mumbai Metropolitan Region, Pune, Pimpri Chinchwad and Nagpur Municipal Corporations. This waiver will now end on March 31, 2022. Apart from a sale transaction, the impact will be quite significant on a transaction involving the gift of immovable property too.
As of now, the stamp duty on a gift of a residential flat to husband, wife, son, daughter, grandson, granddaughter, wife of deceased son is merely ₹200. But from April 2022, the same transaction will attract a 1 per cent stamp duty on an ad valorem basis, considering the flat’s market value.
“It is a significant increase in stamp duty, making Maharashtra among the costliest States for home buyers. This will also hurt developers since most of them had sold houses promising to pay the stamp duty on behalf of the buyers under schemes,” said Suhail Ahmed Khlji, a property lawyer in Mumbai.