This decision will further reduce the prices of houses in the municipal and non-municipal areas except Mumbai. However, the subsidy received by the Municipal Corporation from the state government will be cut.
Mumbai: While the state government has announced a three per cent and two per cent rebate on stamp duty on sale and purchase of houses, the Urban Development Department has taken an important decision to cancel the one per cent surcharge on these transactions by December and recover half a per cent from January to March . Therefore, except Mumbai, the prices of houses in the rest of the municipal and municipal areas will be further reduced. However, the subsidy received by the Municipal Corporation from the state government will be cut.
Thane Municipal Corporation alone had received Rs 140 crore from this grant last year. Although there will not be as many transactions this year, the concession will be a major source of income for the state's municipalities and corporations. Five per cent stamp duty was being levied on sale and purchase of property. As metro projects were underway in Mumbai, Thane, Pune and Nagpur, a one per cent metro cess was being levied on transactions there. Apart from that , a surcharge of one per cent was being levied on these transactions within the limits of Municipal Corporations and Municipalities in the rest of Maharashtra except Mumbai . As a result, rural areas had to pay five per cent, non-metro urban areas and Mumbai six per cent and cities with metro projects excluding Mumbai seven per cent.
Presenting the state budget in March 2020, Finance Minister Ajit Pawar abolished the one per cent metro cess in metro-run cities. The decision to reduce stamp duty was announced at a cabinet meeting last week. At the same meeting, the issue of concession in surcharge was discussed. Accordingly, as per the order of Urban Development Minister Eknath Shinde, the department announced the above concession. Therefore, only two per cent stamp duty will have to be paid on the sale and purchase of property at all places in the state till the end of December. So, from January to the end of March, the rest of the urban areas except Mumbai will have to pay three and a half per cent and other places three per cent.
Financial blow to the Municipal Corporation
In cities except Mumbai where one per cent surcharge is levied, the government pays a subsidy to those Municipal Corporations at the end of the year. The aim is to raise funds for urban infrastructure.
However, the surcharge has been revoked for three months and halved for the next three months. Accordingly, the municipality will get the grant at the end of the year.
Not many transactions took place in the first four months and the remaining eight months are discounted. Therefore, the municipalities, which are in financial crisis due to corona, will have to release water on this grant.
