Flats in Mumbai to witness hike in stamp duty
A bad news is in store for tenants and owners of flats in Mumbai!
Stamp duty is going to be dearer for flats in the city after the recent announcement of budget by state finance minister on 20th of March.
The hike in stamp duty will be applied for both rentals as well as leave-and-licence agreements. However, as a solution, stamp duty can be reduced if the security deposit on flats in Mumbai is lowered.
As of now, it has been decided that the state government will take 0.25% of the calculation of stamp duty which includes the annual rent, the security deposit and 10% of the security deposit.
The calculation of stamp duty gets affected because of all these factors. However, earlier only rent and security deposit were included and stamp duty was paid according to various slabs.
As per reports, stamp duty is assumed to be increased by 50% for flats that gains Rs 1.5 lakh as monthly rent and Rs 10 lakh security deposit. However, this won’t be the same for flats of lower margin. Flats commanding a Rs 40,000 monthly rent and Rs 3 lakh security deposit will have a lesser hike.
Also, the flats whose agreements are signed for Rs 80,000 rent and security deposit around Rs 5.75 lakh will face the hike and will be almost double the current stamp duty.
As of now, stamp duty is charged differently as per different slabs. With the new system in place, all the old slabs will be gone.
Every year, around million leave-and-licence agreements are signed in Mumbai and which generates a huge stamp duty in turn.
Maharashtra Societies’ Welfare Association has commented that such a move of raising the stamp duty will increase it by 25% to about 500%. This initiative will in anyway not boost the rental market in Mumbai. It will also be a burden on prospective home buyers as well.
To make the stamp duty collection system easy, Maharashtra cabinet had earlier approved a new model under which authorized banks will collect stamp payments. With this the whole system will be secured against fraudulent transactions.
Soon, you can pay the stamp duty for property transactions by just visiting a single bank, then going around several offices. Authorized banks will only be able to collect stamp duty payments.
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