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Maharashtra not to extend stamp duty cut; maintains status quo on circle rates

In a relief to homebuyers, the Maharashtra government has decided not to increase the ready reckoner rates, also known as circle rates, for FY22. (Photo: Mint)Premium
In a relief to homebuyers, the Maharashtra government has decided not to increase the ready reckoner rates, also known as circle rates, for FY22. (Photo: Mint)

  • Housing sales picked up in Maharashtra as the government had cut stamp duty in August by 2-3%. Stamp duty was reduced to 2% from 5% till 31 December 2020, and was at 3% during January-March 2021.

NEW DELHI: In a relief to homebuyers, the Maharashtra government has decided not to increase the ready reckoner rates, also known as circle rates, for financial year 2021-22 (FY22). However, against the expectations of many, the state government decided not to extend the cut on stamp duty. Housing sales saw good recovery supported by the stamp duty cuts, low home loan rates and attractive schemes offered by developers.

Amit Goyal, CEO, India Sotheby's International Realty, believes that extension of the cut in stamp duty would have helped in sustaining the sales momentum.

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“The stamp duty cut, which was introduced in September last year to help the real estate sector tide over this global crisis, was instrumental in accelerating housing demand in both primary and secondary residential markets, including high end luxury segment of Mumbai Metropolitan Region (MMR) and Pune, the two key cities in the state. Sales registration numbers of these two cities testifies this fact. Even the state government revenue remained intact, infact it grew during this September 2020 and March 2021 period. It was a win-win situation for all stakeholders and gave the much-needed sales momentum to MMR developers," said Goyal.

Housing sales picked up in the state as the government had cut the stamp duty in August by 2-3%. Stamp duty was reduced to 2% from 5% till 31 December 2020, and was at 3% during January-March 2021. The reduced rate expired on 31 March 2021 and many had hoped the government will offer an extension. On Women’s Day, the government had announced a 1% reduction in stamp duty, to be effective 1 April.

Some experts, however, feel that the decision of not extending the stamp duty cut may not deter homebuyers.

“The stamp duty cut certainly did help boost residential sales in Mumbai Metropolitan Region (MMR), the pandemic notwithstanding. That said, sales velocity was also aided by builder discounts and low home loan interest rates. Together, these factors brought down the cost of buying homes in MMR by anywhere from 5-15%. Nevertheless, people in MMR aren't buying homes just because they're cheaper - they're buying them because the covid-19 pandemic has infused urgency and a desire for autonomy from rent and landlords," said Anuj Puri, Chairman, Anarock Property Consultants.

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