Developers have made a demand to the Maharashtra government to provide either a complete or partial waiver in stamp duty payment to boost sales of real estate in the state.
This specific demand was made on Sunday to Chief Minister Eknath Shinde at National Real Estate Development Council (NAREDCO) organised property exhibition in Mumbai.
Those batting for concession were Shinde camp’s MLA-cum-builder Pratap Sarnaik, Raunak Group’s Chairman and NAREDCO’s Vice President (West) Rajan Bandekar among others.
Providing the rationale for the demand, they referred to the rising home loan interest rate. The latest of which was done last week by the Reserve Bank of India when half a percentage was hiked. Since May, the RBI has increased the interest rate by 190 basis points or 1.90% in four monetary policy announcements.
Property buyers have to pay 6% stamp duty, which was increased by a percentage starting April 2022. The government has levied transport surcharge and metro cess for the infrastructure being created in the Mumbai Metropolitan Region.
During the pandemic, the Maharashtra government supported economic activity had reduced stamp duty to 2% from September to December 2020 and 3% between January to March 2021. The same was restored to 5% from April 2021 and increased 1% a year later.
“If the state waived off half of the stamp duty, we developers are willing to provide the balance 3% relief to the home buyers. Effectively, it will be nil stamp duty for the end consumers. This will support in increasing sale momentum for the existing housing stock inventory,” said Sandeep Runwal, President, NAREDCO Maharashtra and Managing Director of Runwal Group. Currently, the industry has an inventory overhang of about four months.
In another demand, Manju Yagnik, Vice Chairperson, Nahar Group sought additional concessions for women homebuyers.
At the property exhibition, CM Shinde remained non-committal but kept the option open stating that he will consider a partial stamp duty waiver after a detailed analysis of the benefits of the concession is provided to him. During the pandemic, in the erstwhile Maha Vikas Aghadi government, he was in charge of the Urban Development portfolio and had successfully proposed and pushed for relief in stamp duty payment, this decision had provided the impetus to the real estate sector along with over 200 allied industry associated with the industry to recover from Covid-19 induced economic shock.
Last year, the MVA government provided various sops to the industry such as 50% in construction premiums paid by the builders to the state. For the homebuyers, this benefit did not get translated to an equivalent reduction in property prices. On the contrary, the builder lobby hiked sale prices of their projects wherever infrastructure and transportation networks is under construction and in proximity.