MMR developers want stamp duty rebate to continue for one year

Mumbai developers, who tasted the impetus their home sales received after the 3 per cent stamp duty cut, have demanded that Maharashtra government extend the rebate ending on March 31, 2021 by another 12 months.

CREDAI-MCHI, which represents over 1,800 developers in Mumbai Metropolitan Region, made this demand in a letter handed to Maharashtra revenue minister and Congress leader Balasaheb Thorat recently.

The letter pointed out that the stamp duty rebate had not only substantially improved home buyer sentiments and property registrations since August 2020, but also increased the tax collections for the state due to high volume of home sales and contributed to job creation. The stamp duty was cut from 5 per cent to 2 per cent from Sept 1 till December 31, 2020, and then increased to 3 per cent from January 1 to March 31, 2021. The rebate has created positive cascading effect enabling the real estate industry to led the revival of the COVID-19 pandemic impacted economy, the letter said.

Acknowledging the support of the government in this recovery, CREDAI-MCHI said extension of the rebate till March 31, 2022 will further help sustain sales momentum that has led to record breaking property registrations and help the recovery.

Deepak Goradia, President, CREDAI MCHI, lauded the decisive and forward looking approach taken by the revenue minister. “We have requested the Maharashtra government to grant an extension of the stamp duty rebate for another 12 months to sustain the momentum and continuing the positive cycle of investment.” He said over 250 ancillary industries are directly and indirectly dependent on the industry and such a rebate would lead to further job creation and overall economic revival.

After the 3 per cent stamp duty cut was implemented, the property registrations shot up gradually to record breaking levels.   September 2020 witnessed registration of 5,597 properties, followed by 7,929 registrations in October, 9,301 registrations in November, and 19,584 registrations in December. While stamp duty increased by 1 per cent from January 1, the sales momentum continued with January logging 10,412 registration and February clocking 10,170 registations, according to the Inspector Generation of Registrations data.

The total value of properties sold also increased to never-before levels with September (Rs 9,025 crore), October (Rs 11,640 crore), November (Rs 14,395 crore) December (Rs 34,025 crore), January (Rs 10,170 crore) and February (Rs 11,745 crore), according to a Propstack report. Multiple factors including pent-up demand, lowest home loan rates, substantial savings in stamp duty for higher priced inventory, and discounts offered by developers contributed to the sales momentum.