1% surcharge on stamp duty: ‘Proposal will hamper consumer sentiment’

Earlier last week, the state government published the draft of its proposals in the Brihanmumbai Municipal Corporation (Second Amendment) Act.

The Maharashtra government’s proposal to levy a one per cent surcharge on stamp duty will hamper consumer sentiment, especially in the affordable housing segment, according to a report authored by Anuj Puri, the chairman of real estate consultancy, Anarock. It is happening at a time the Mumbai Metropolitan Region’s real estate market is shedding its lethargy and showing signs of revival. Earlier last week, the state government published the draft of its proposals in the Brihanmumbai Municipal Corporation (Second Amendment) Act.

There, it proposed to levy the surcharge of one per cent on the existing stamp duty of five per cent on sale, lease, gifts and mortgage of immovable properties. That effectively raises the price of such real estate transactions. “This is a significant increase in the cost of real estate purchase that will hamper consumer sentiment – especially in the affordable housing segment. On the one hand, the Government has rolled out multiple sops to boost affordable housing – and on the other, it is increasing the cost of properties. One can only hope that at least affordable housing is saved from this surcharge,” said the report from Anarock. “This is real and painful, and the impact is very hard to mitigate,” the report said. The proposed increase in surcharge comes at a time the real estate sector is showing some signs of traction.

In the Mumbai Metropolitan Region, supply of houses increased to 13,600 units in the quarter that ended in June from 8600 unit in January-March. That was a significant increase of 58 per cent. Sales of homes also increased. In the Mumbai Metropolitan Region, sales increased 26 per cent from the 12,050 units in the quarter that ended in March to 15,200 units during April-June. That said, there is an unsold inventory of over 7 lakh residential units in the top seven cities in India. The stock is what is keeping prices in check.

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