All you need to know about property registration and stamp duty charges in Mumbai

Property registrations have been reinstated by the Maharashtra government at 5% in Mumbai and 6% in the rest of the state. 

To ease homeownership and provide a boost to the real estate sector amid the economic crises caused by the Coronavirus pandemic, the Government of Maharashtra has reduced the Stamp Duty in Maharashtra to 2-3% of the property value. However, from April 2021, the stamp duty in Maharashtra has been reinstated.

Stamp Duty in Maharashtra

Total Stamp Duty in Maharashtra includes Stamp Duty, and additional taxes as follows: 

In urban areas falling under Municipal Corporation or Municipal Council limits, there is a cess/ transport surcharge/ local body tax payable. This is 1% of the property value, and is intended to be used for funding transport infrastructure projects in the cities such as Metros, bridges, flyovers, etc.

In rural areas which fall under Gram Panchayat and not under the jurisdiction of any Municipal Corporation or Municipal Council, this cess/ surcharge is replaced by Zilla Parishad cess. This cess is also payable at 1% of the property consideration value.

An additional surcharge of 0.5% is applicable on areas falling under the Nagpur Municipal Corporation (NMC) and Nagpur Improvement Trust (NIT) jurisdictions. This is over and above the 1% cess/ surcharge payable.

Stamp Duty in Maharashtra in 2021

After 31st March 2021, as the economy has started to stabilize, the Stamp Duty in Maharashtra has been reinstated to 5% of the of the property value for Mumbai and 6 percent for the rest of the State, as applicable until 31st August 2020.

Reduction made in stamp duty in 20-21

A reduction of 3% in Stamp Duty applicable till 31st December 2020, and 2% till 31st March 2021 for Mumbai (city and suburban districts). 

A reduction of 2% in Stamp Duty applicable till 31st December 2020, and 1.5% till 31st March 2021 for all other areas in Maharashtra.

A reduction of 1% in cess/ surcharge/ local body tax till 31st December 2020, and 0.5% till 31st March 2021 for all areas in Maharashtra. 

However, the 1% Metro cess in Mumbai and 0.5% surcharge in Nagpur has not been reduced.

These rates are applicable from 1st September 2020 to 31st December 2020. The Stamp Duty payable from 1st January 2021 to 31st March 2021 would be 3-4% of the property value.

After 31st March 2021, the stamp duty rates are expected to be in the range of 5-6%, until any further announcement by the State government. 

How does this reduction affect buyers?

At 5-6% of the property value, the Stamp Duty makes up a considerable amount of money to be paid upfront while buying a house. It may not seem significant in affordable areas, but in areas such as Mumbai and Pune where property prices are high, it makes a substantial difference.

For instance, for a property in Mumbai costing Rs 1 Cr. The stamp duty payable was Rs 5 lacs (5% of Rs 1 Cr) until August 2020. Now after reduction, the stamp duty payable on a property worth Rs 1 Cr. is Rs 2 lacs till December 2020, and Rs 3 lacs till March 2020. This results in savings of up to Rs 3 lacs.

When can you get a stamp duty refund in Maharashtra?

• If the stamp paper is deemed not fit to use because it has writing mistakes.
• If the stamp paper is unsigned or is full of incomplete information.
• If the court of law or any of the parties find out that the transaction is illegitimate
• If the stamp paper is not signed by one of the parties
• If the terms and conditions are not agreed by one of the parties
• If one of the parties dies before the stamp paper is signed

Property registration charges and stamp duty rates depend on various criteria and are different in all states. Mumbai follows the stamp duty mentioned under the Maharashtra Stamp Duty Act.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.