Property In Mumbai To Get Costlier As State Hikes Stamp Duty To 6%

Rates of property in Mumbai are set to increase as the Maharashtra government has decided to impose one per cent surcharge on property deals. This means buyers will have to pay six per cent stamp duty on property transactions, as against the current five per cent. According to the state government notification, the hike comes into effect from February 8. The new levy would also apply on gift and mortgage. Apart from the stamp duty, buyers also have to pay one per cent of the property value as registration charge.

Last year, the state government inserted Section 144 F in the Mumbai Municipal Corporation (Second Amendment) Act, 2018, to levy additional stamp duty on property sale, and lease.

The move to levy additional stamp duty on property transactions would act as a dampener, say real estate developers, considering the property market in city has seen no price correction in the past five years.

It is important to note here that Mumbai is among the costliest real estate markets in the world, and despite an ongoing slowdown in India’s real estate sector, rates of property in the country’s financial capital have not moderated as much as buyers would have liked.  

Data available with PropTiger.com show, rates of property in the city have increased by five per cent in the past three years. This is in contrast with rates of property moderating in other big markets in the past five years. Data show a square foot of space in Mumbai costs a buyer an average of Rs 9,300.

Interestingly, home sales in the Mumbai Metropolitan Region increased 22 per cent in the second quarter of the financial year 2019 year-on-year (y-o-y), rising prices notwithstanding. In the third quarter, home sales in Mumbai increased even higher at 54 per cent y-o-y.