On Wednesday, the state government reduced the stamp duty on property registrations to 2% for transactions between September 1 and December 31 from current 5%. The stamp duty will be 3% for agreements to be registered between January 1 and March end.
“The combination of GST exemption, reduced stamp duty and the lowest home loan interest rates in almost two decades is a strong argument now favoring ready-to-move-in homes. If we additionally factor in the ongoing incentives being offered by developers, buyers in the state focused on zero wait homes are at a distinct advantage,” said Prashant Thakur, Director & Head – Research, ANAROCK Property Consultants.
Experts believe, it is reasonable to assume that the government will be able to cover up for revenue lost in lower stamp duty and registration charges by ways of increased sales in the affordable and mid-income segments during the festive season.
With the total ready inventory in Mumbai and Pune region, the government can potentially earn revenue worth around Rs 656 crore including Rs 471 crore in MMR and Rs 185 crore in Pune at the stamp duty rate of 2%.
Homebuyers’ interest in ready and nearing completion projects has been on the rise even prior to this. However, it has started to pick up further post the announcement of reduction.
“Over the last two days, the flow of enquiries for ready apartments in Mumbai, Pune and peripheral areas has increased post the stamp duty reduction. A major part of this is coming from the NRI (Non-Resident Indians) segment. This will also help in reducing ready inventory, which has been a fast moving category,” said Kanika Gupta Shori, COO, tech-led property brokerage platform Square Yards.
Of the total 33,500 ready homes in MMR and Pune presently, nearly 44% are in the affordable category priced below Rs 40 lakh.
In the under-construction category, properties scheduled to be completed in the next 6-7 months are also expected to be preferred by homebuyers. While these are not exempt from GST, they are invariably priced 5-10% lower than their ready-to-move-in counterparts.
Additional 55,750 units are expected to be completed in MMR and Pune by March 2021, the time when reduced stamp duty rates will revert to normal. Of this total supply, MMR has 32,850 under-construction units while Pune has 22,900 units.