To boost the stagnant real estate market hit by COVID-19, the Maharashtra government on August 26 decided to temporarily reduce stamp duty on housing units from 5 percent to 2 percent until December 31, 2020, sources said.
Stamp duty from Jan 1, 2021, until March 31, 2021, will be 3 percent, they said. The decision was taken at the state cabinet meeting on August 26.
Real estate developers had been asking for a reduction in stamp duty following the lockdown to encourage homebuyers to purchase properties during the pandemic.
“Maharashtra Government’s decision to reduce the stamp duty from 5% to 2% till December 31 augurs well for the revival of MMR realty and is a much-needed boost to the ailing sector amid the pandemic. The reduced cost of the stamp duty is bound to encourage first-time homebuyers, fence-sitters as well as resale flat buyers to invest in real estate,” said Nayan Shah, president, Credai-MCHI.
“The move will benefit the customer and foster demand creation along with giving a stimulus to the allied industries coupled with employment generation. 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, said Jaxay Shah, Chairman, CREDAI National.
“Coupled with the festive season, we expect demand to pick up significantly which will provide a huge respite not only to home buyers but also to developers who have been suffering amid low demand and limited cash flow availability due to Covid-19,” he said.
On August 15 state revenue minister Balasaheb Thorat hinted at a 2 to 3 percent reduction in stamp duty on property registrations in the state was in the anvil.
Also speaking on the matter, Niranjan Hiranandani, National President, Naredco said, “This will certainly stimulate the housing demand and help in converting inquiries into the sales closures. The fiscal advantage should nudge fence-sitters to convert into the actual home buyers with rippling effect on economic growth.” adding that With many other favorable market conditions, this announcement shall rekindle ailing real-estate sector and see volumes in transactions. “If the central government can slash GST rates in an upcoming council meeting would act as a shot in the arm”.