Property developers urge State Government for significant cuts in stamp duty

Given that real estate business has come to a standstill in regions like Mumbai, the property developers’ body, known as MCHI-CREDAI has written to Maharashtra’s Revenue Minister, Balasaheb Thorat, demanding a drop in stamp duty percentage that is given to the government.

The body is asking for the stamp duty to be dropped down to 1% for development agreement, joint ventures as well as joint developments to provide relief to home buyers over the next four months.

Stamp duty currently stands at 5% of the property value. This is after the 1% concession offered by the Maharashtra Government which went into effect on April 1, 2020. The government mentioned that this concession will be applicable for a period of two years in the Mumbai Metropolitan Region, Pune, Nagpur, and Pimpri Chinchwad. 

Nayan Shah, President, MCHI-CREDAI said - “In the midst of an economic disruption, Indian Real Estate has suffered extensively and needed critical intervention from the Maharashtra Government for its survival. We also request the authorities to share a stimulus package to alleviate fears of job loss in the industry, with lacs of workers directly or indirectly dependent of the industry.”

MCHI-CREDAI said that a reduction in stamp duty costs will benefit developers who form alliances to develop land together. Given the major slump seen in real estate markets over the past few months, this would be considered a wise call on the part of the developers. However, it’s unlikely that the government will budge to the requests considering the financial burden this would impose on the exchequer. 

Reports have estimated that the coronavirus and the consequent lockdown will have a terrible impact on the country’s economy. In the midst of the slowing economy, expecting a cut in stamp duty percentages may not be feasible.