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August 27, 2020

Maharashtra government slashes stamp duty from 5% to 2% until Dec 2020 & 3% till Mar 2021

by facelesscompliance in Compliance Law

Maharashtra government slashes stamp duty from 5% to 2% until Dec 2020 & 3% till Mar 2021

To boost the stagnant real estate market hit by COVID-19,  the Maharashtra government on August 26 decided to temporarily reduce stamp duty on housing units from 5 percent to 2 percent until December 31, 2020.

Stamp duty from Jan 1, 2021, until March 31, 2021, will be 3 percent. In Maharashtra, stamp duty charges are 5 percent in key cities like Mumbai, Pune, Nagpur and Nashik and 6 percent in others

The Maharashtra government on March 6 had announced that it is reducing stamp duty on properties by 1% for Mumbai, MMRDA Region and Pune for a period of two years.Stamp duty rates in other major states largely hover anywhere between 5-8 percent, but they are lower in some states if property registration is executed in the name of a woman. Delhi, Uttar Pradesh, Rajasthan, Punjab, and Haryana offer relaxation in stamp duty for women buyers. The exemption on stamp duty ranges from 1-2 percent in different states.

The stamp duty is the largest revenue earner for the government.

The Maharashtra government has decided to reduce stamp duty on real estate transactions between Sept. 1, 2020, and March 31 next year as part of measures to revive the state’s economy and developers who have been battered by the pandemic. The duty will be reduced in two slabs, according to an official statement.

1) There will be a 3% reduction in stamp duty between September 1 and December 31, 2020.

2) 2% reduction between January 1, 2021, and March 31, 2021.

The announcement is over and above the 1% reduction in stamp duty for two years that the state government had announced in its maiden budget in March.

The reduced cost of stamp duty is bound to encourage first-time homebuyers, fence sitters as well as resale flat buyers to invest in real estate. Coupled with the festive season, expect demand to pick up significantly which will provide a huge respite not only to home buyers but also to developers who have been suffering amid low demand and limited cash flow availability due to Covid

The expectation from people are, if the central government also considers increasing interest exemption limit for homebuyers, it will certainly boost dried-up demand.

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