Stamp Duty Cut in Maharashtra drives property registration worth Rs 11,000 Cr in Mumbai

by Suman Gupta

The month of February 2021 witnessed over 10,000 housing units registered in Mumbai almost equivalent to January 2021 on the back of the stamp duty cut by the Maharashtra Government.

On August 26, the Maharashtra government decided to temporarily reduce stamp duty on housing units from 5 percent to 2 percent until December 31, 2020 to boost the stagnant real estate market, which had been hit hard by COVID-19. Stamp duty from January 1, 2021 until March 31, 2021 is 3 percent.

As per the government data by IGR (Inspector General of Registration) Maharashtra; September saw registration of 5597 properties registered, October saw 7929 properties being registered, November saw 9301 properties, December 19584, January 10412 whereas February sees 10170 properties being registered.

Commenting on the robust numbers Mr. Ashok Mohanani – President, NAREDCO Maharashtra said, “The consumers have grabbed the golden opportunity to purchase properties in the last few months as the bank loan interest rates are at an all-time low coupled with great property prices and reduced stamp duty benefits. Similarly, we anticipate robust sales this month too which will be equivalent to December 2020 as the consumers will try to avail of 3% stamp duty benefit before March 31st. NAREDCO Maharashtra has already contributed to the rise in the property registrations in the last quarter of 2020 with their historic decision of zero percent stamp duty which spurred the housing demand in the State.”

As per data shared by Propstack, in February 2021, properties worth Rs 11,745 crore were sold indicating that this value is up 34 percent YoY and 15 percent MoM. The total value of properties in September 2020 stood at Rs 9025 crore, Rs 11640 crore in October 2020, Rs 14395 crore in November 2020, Rs 34025 crore in December 2020, Rs 10170 crore in January 2021 and Rs 11745 crore in February 2021.

“The sector is expecting a windfall of registrations in the month of March 2021, in line with the response received in December 2020. The month is expected to end with a registration number in the range of 10000 – 14500. Y-o-Y it will be an upwards of 100-150% growth, as the city abruptly entered into a lockdown same month last year. Developers are pinning hopes on fence sitters who are expected to close their transactions and avail of the 3% stamp duty benefit until March 31st. Post April 2021 the market is expecting the affordable housing industry to deliver handsome numbers as a result of the suppressed demand that has been unable to enter the market due to travel restrictions with the help of local trains,” opines Mr. Ram Naik – Executive Director, The Guardians Real Estate Advisory.

In December 2020, properties worth Rs 34000 crore were sold in Mumbai alone, many of them in the luxury segment. Bankers, stock brokers, corporate honchos, celebrities and even NRIs came forward to close big-ticket real estate deals in the city.