Home-buyers and real estate investors have gotten curious in the last few days about the increasing stamp duty. What are the changes that the real estate market will face? Will it impact purchase decisions? Will there be any upsides or considerable downsides that the buyers or sellers will have to face? As these questions toggle your mind more and more, let us clear the fog for you.
When you decide to invest in a property, commercial, residential, or other; it is not just possession from the previous owner that you require. In order to become the lawful owner of a property, you need to have government-approved evidence of the property. When you sign on a particular property ownership document, you need to pay tax for it to the government. This confirms your ownership. The tax that you pay here is called stamp duty.
The stamp duty is payable while the time all legal documents are signed and approved by both the parties and present government officials. Stamp Duty is dependent on multiple factors, like the type of property (commercial/residential) (old/new), current market value, etc.
Stamp duty is payable by both parties equally. If you fail to pay stamp duty on time, it invites penalty charges.
The Maharashtra Stamp Act was passed in 1958. Under this act, as mentioned in Schedule 1 all the payables of the stamp duty shall go to the state government. The act was amended recently and has put forward many updates. A few updates include reduction in stamp duty in gift deeds, online portals for payment, revision of penalty clauses, etc.
Recently the government has announced that the stamp duty will increase from April 2021. Here’s what you should know about the change in the act and the increasing stamp duty:
According to the 2021-22 budget passed by Mr. Ajit Pawar, there will be a concession of 1% on prevailing real estate stamp duty for any property purchase. This low stamp duty will only apply if the transfer of house property or registration is done by a female.
Different parts of Mumbai will now observe 3 different percentages of stamp duty. Stamp duty rates will now increase from 3% to 5% of which 1% will be metro cess.
Navi Mumbai and Thane will witness a rise from 4% to 6% which will include local body tax and transport surcharge.
Pune and Pimpri Chinchwad will have different stamp duty rules. However, currently, both these municipal corporations will face an increase of 2% ( from 4% to 6%), which will include local body tax and transport surcharge.
The government is now promoting stamp duty and registration charges payments through online portals. This service shall be available from the Maharashtra Stamp Duty Online Payment Portal. You will have to register and enter the necessary details to proceed with your payment. The government has assured that this will make the process easier for everyone included in it.
The Bombay high court has stated that stamp duty cannot be collected for any past documents that were inadequately signed. All the payable stamp duty charges will only be dependent on the current market values during the time of transaction.
These were the key pointers we concluded from the change in stamp duty and registration charges act. To know more about the changes in stamp duty and its impact on the real estate market, you can visit official government websites. Any queries regarding the same will be addressed and welcomed at our customer care help desk too. To get in touch, visit here.
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