Mumbai: Buying property in Mumbai set to get costlier

In a statement of objectives and reasons for the Bill, Chief Minister Devendra Fadnavis, who heads the state urban development department, said: “The state government recognises the need to implement ‘Vital Important Urban Transport Projects’ related to mass rapid transit systems, such as Metro rail, Monorail, Bus Rapid Transport systems, freeways, and sealinks, etc.”

The state’s budget for 2018-19 has projected that the public debt will cross Rs 4.61 lakh crore by March 2019, which could force the government to spend a staggering Rs 34,385 crore from its spending plan for 2018-19 on servicing the debt. Owing to the mounting debt, the state’s fiscal managers had earlier announced a policy decision to fund big ticket infrastructure projects by raising additional resources or through off-budget borrowings.

“With a view to ensure that the (civic) corporation or a (state-run) agency, which has undertaken the notified vital important urban transport project, has sufficient funds at their its disposal for this purpose, it is considered expedient to levy a surcharge by way of stamp duty leviable on the instruments of sale, gift, and usufructuary mortgage respectively of immovable properties, in the area of Mumbai,” said the CM.

At present, the stamp duty on property transactions in the financial capital is up to five per cent of the government determined market value of the property. Once the additional levy kicks in, this will go up to six per cent for sale, gift, and mortgage transactions.

The Bill will now be tabled in the Legislative Council. Sources, however, said that the new rate will come into effect once the government issued a notification in this regard. “We have made an enabling provision for levying the additional surcharge in the Bill,” said a senior official. Provisions have also been made to allow the government to transfer the additional revenue, so collected through the surcharge, to the project implementing agencies, the official added.

Incidentally, the Bill was passed on Tuesday amid din without any discussion. In fact, pushing through official business amid the din, the government ensured the passage of eight other bills in the Assembly. These included conversion of a much-debated ordinance, issued last month, related to revisions and amendments in the functioning and the regulation of agriculture produce market committees (APMC) across the state, and new amendments introduced to the Maharashtra Goods and Services Act, 2017.

The Opposition was up in arms against the move. The NCP’s Ajit Pawar questioned the manner in which the government is pushing through official business.

“Nine bills were cleared without any discussion today. On Monday, four other bills were cleared. It seems as if the government is not serious about a discussion on legislative agenda.”

The Opposition also pointed out that supplementary grants worth over Rs 20,000 crore were passed without any discussion.

While approving various Metro corridors in the Mumbai Metropolitan Region, Pune, and Nagpur, the state Cabinet has agreed in-principle to permit collection of betterment charge from construction projects within 500 meters of a transport corridor, while offering additional buildable rights to them.

Sources said that the levy of additional stamp duty and revenue raised through betterment charges has already been factored in while planning various Metro rail models. The government has plans to replicate this for other mega infrastructure projects as well.

While the state finance department has also suggested levy cess on development rights certificates (DRC) to raise additional revenue, the urban development and housing departments have opposed the move, claiming that this would further hit affordability of housing in Mumbai.