MAHARASHTRA : Homebuyers sitting on the fence are likely to enter the Property market and move forward with their purchase decisions following the the temporary reduction in stamp duty by Maharashtra government, according to top real estate developers.
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The ready-to-move-in residential properties will be in more demand than the under-construction flats, they said.
On Wednesday, the Maharashtra government decided to slash stamp duty on sale deed documents by 3% from September 1 to December 31, 2020, and by 2% from January 1, 2021 to March 31, 2021.
Currently, the stamp duty rate is 5% for urban areas and 4% for rural areas.
Stamp duty is a transactional tax collected by the government on property purchases.
"The temporary stamp duty reduction is an excellent move by the Maharashtra government. It has been intelligently designed to expire in a time-bound manner which creates an incentive for fence-sitting homebuyers to move forward with their purchase decisions," Godrej Properties Executive Chairman Pirojsha Godrej told PTI.
Embassy Group Chairman and Managing Director Jitu Virwani termed it as an encouraging move by the Maharashtra government.
"It will boost the housing sector and bring in the much needed confidence among homebuyers ahead of the upcoming festive season. Ready-to-move-in homes will be attractive with the reduction in the stamp duty," he said.
Virwani said other state governments should follow suit and reduce stamp duty on property registration.
Tata Realty and Infrastructure Ltd MD & CEO Sanjay Dutt said the decision will definitely lead to an increase in sales volume.
However, he said, sales may not rise substantially as circle rates or ready reckoner rates are higher in many locations than the prevailing market rates.
Arvind Subramanian, MD & CEO, Mahindra Lifespaces described it as a commendable move that will improve affordability, especially for aspiring first-time homebuyers.
"It will aid in accelerating purchase decisions, while driving demand in the affordable and mid-premium segments. This is an opportune time for intending homebuyers who have put off decision-making due to the pandemic. Allied industries also stand to benefit," he said.
Anarock Property Consultants Chairman Anuj Puri said homebuyers can view the cut in stamp duty reduction as a direct cut in the overall cost of acquisition.
"In highly expensive markets, a 2-3% cost saving is extremely significant," he said.
Dhruv Agarwala, CEO of PropTiger and Housing.com, said lowering of stamp duty will reduce the overall cost for buyers.
He hoped that other states will adopt a similar strategy to boost housing demand and revive overall economy.
"The low interest regime coupled with stable prices are also likely to increase demand in the coming future," Agarwala said.
The lowering of the stamp duty will increase compliances and hence, may positively impact exchequers revenue, he said.
"Also, in many of the cities across the country, the prevailing circle rate is not in sync with ground realities and hence, there is a case to reduce circle rate in such cities and areas, especially where the gulf is larger," Agarwala said.
According to Anarock, Mumbai Metropolitan Region (MMR) and Pune have 18,500 units and 15,000 units, respectively, that are currently completed and unsold.
MMR and Pune are the two major markets in Maharashtra.
