Oct 14, 2022
“When we visit South Mumbai, we see iconic structures developed by the British. We are expecting each one of you to develop iconic structures in the city and create landmarks. You can tell us if any support is needed from the government’s side for this,” said Chief Minister Eknath Shinde.
The government of Maharashtra wants real estate developers to build iconic structures in the country’s financial capital Mumbai and has sought their suggestions with regards to measures needed for the same.
“When we visit South Mumbai, we see iconic structures developed by the British. We are expecting each one of you to develop iconic structures in the city and create landmarks. You can tell us if any support is needed from the government’s side for this,” said Chief Minister Eknath Shinde.
The state government will continue to support the real estate sector given its linkages with over 250 allied industries and its contribution to job creation. However, developers will also have to contribute from their side by developing accessible and affordable homes for all, he said while speaking at a CREDAI conference.
While batting for a slum-free city with a push for affordable housing, he also reinforced that the state government is “positively” considering a reduction in stamp duty charges for registrations of property transactions and premiums paid by realty developers to the state exchequer.
Realty developers also offered to extend benefits to homebuyers if the government decides to reduce the stamp duty charges.
“We can absorb the homebuyers’ stamp duty burden entirely if the government reduces the stamp duty charges to 3% from the current level. This will help the homebuyers realize their dream of buying a house and we will also be able to register higher sales volume, revenue for the government and create more jobs,” said Boman Irani, President, CREDAI-MCHI.
As a minister of Urban Development in the previous government, Shinde had already provided concessions on premium to the real estate industry that helped its revival to a large extent and is willing to extend support to the industry even now.
Following the imposition of the metro cess, stamp duty on property registration in Pune and Mumbai, which are the country’s most expensive and largest real estate markets, have increased by one percentage point.
In Mumbai, the stamp duty is now 6% of the asset's value while it has risen to 7% in Pune, Nagpur, and Thane.
According to the minister, the government will push the redevelopment projects in the city through cluster development to ensure better infrastructure planning and rehabilitation of people at the same location rather than pushing them to the peripheral areas.
Mumbai, the country’s commercial capital, has been setting new benchmarks with property transactions over the last two years after the state government announced a limited-window stamp duty reduction.
With an objective of kick-starting the real estate sector and nearly 260 linked industries by encouraging housing sales, the state government had announced a reduction in stamp duty charges to 2% from 5% from September 2020 till the end of December 2020. Stamp duty was charged at 3% of the agreement value between January 2021 and March 31, 2021.
The significant but limited-period stamp duty reduction window that ended in March 2021, was a catalyst for the city’s residential market. While stamp duty rebates are not available now, the deals have continued to flow in.
The state government’s revenue collection through stamp duty charges has recorded its all-time high so far in 2022. The implementation of an additional 1% metro cess, combined with price increases and the sale of larger ticket size units, resulted in a 57% increase in revenue collection from January to September of this year, totaling Rs 6,658 crore.
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