Just when the Real Estate market in Mumbai decided to show some positive trend, the government have proposed to levy surcharge on stamp duty by 1% on property deals, making buying houses even more costly.
The Government has proposed to increase stamp duty to 6% from existing 5%. The State Government published draft of the Second Amendment of Mumbai Municipal Corporation, Act, 2018 by insertion of Section 144 F where it plans to levy additional stamp duty on transfers of certain immovable properties. This will increase the cost of the transactions of realty deals and is expected to further have an effect on the already difficult market in the short-term. This additional surcharge is likely to disappoint overall sentiment and will impact the market. We might see delayed decisions from potential buyers, especially for those seeking property in the affordable market, as their budgets are likely to suffer a blow due to this hike.
The real estate sector in the past few years continues to be plagued by slowdown due to decrease in sales and new launches. However, things are gradually improving this year as builders are now decreasing rates and also giving lucrative schemes to woo homebuyers. Banks have also eased norms and brought down interest rates on home loans.
According to the Urban Development Department, the amount collected will be used to fund infrastructure projects in the city such as the metro rail, monorail and bus rapid transport system, including freeways and sea-link.
This proposed surcharge will bring a drastic change and it isn’t so beneficial to Developers that are attracting sales by waving off stamp duty charges as either they will have to absorb the higher stamp duty cost or add up to the buyer’s total cost resulting in delayed decisions from potential buyers.
How this will impact the buying decisions, Time will tell.
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