Mumbai Stamp Duty: Mumbai property market hits new high with over Rs 1,131 in stamp duty collected in March

Property registration in Mumbai, the country’s largest and most expensive real estate market, continued its record frenzy by hitting a new high with the highest monthly stamp duty collection at nearly Rs 1,131 crore in March .

The performance surpassed the previous record of Rs 875 crore hit in March 2021, when homebuyers took advantage of a lower stamp duty.

The commercial capital of the country recorded the registration of over 16,152 residential transactions in March, making it the third highest performance ever, according to data from the Inspector General of Registration of Maharashtra. This record number is up 98% from January, which itself was a 10-year high.

This is also the only time the number of registrations exceeded the 15,000 mark, with the exception of December 2020 and March 2021, which was attributed to the government stamp duty reduction then in effect. .

Historically low interest rates, incentives and stable prices are prompting a vigorous response from homebuyers for nearly six quarters and now fear of higher prices due to cost pressure or a revision to higher government rates, including a 1% subway tax and ready-to-calculate values ​​also pushed sales velocity.

“Demand continues to be robust with a strong conversion of inquiries into actual sales and this recovery in business is also translating into increased revenue for the government. Today, construction costs are rising, in addition to the metro tax and a likely increase in off-the-shelf rates leading to higher stamp duty may be a disincentive for purchases leading to disruption of this momentum,” said Boman Irani, Chairman of CREDAI -MCHI, which has asked the state government to defer the proposed taxation of Metro cess for a period of at least one year, until April 1, 2023.

Registrations in March are about 9% and 17% lower than December 2020 and March 2021, respectively, when homebuyers rushed to take advantage of a reduced stamp duty. However, the Public Treasury received 30% and 66% higher revenues in March compared to March 2021 and December 2020.

“Strong demand and a catalyst, such as the impending closure of the metro from 1 April 2022, have motivated buyers to accelerate their buying decision. It is heartening to see that the residential market in Mumbai has maintained its pace for a significant period after the withdrawal of demand stimuli. We strongly believe that pent-up demand will remain strong, supported by low mortgage lending rates and stable property prices,” said Shishir Baijal, CMD, Knight Frank India.

Baijal hopes the state government will take constructive steps to ensure the buoyancy of the sector as the change in the stamp duty structure along with rising input costs and an upward trend in retail inflation can pose challenges to sustaining this demand, especially from end users.

During the month, peak listings were in the price range of Rs 1-5 crore while in terms of apartment size, mid-sized houses between 500 and 1,000 sq ft were the highest category. favourite. With a 51% share, the city’s western suburbs continued to dominate home sales in the city.

The daily average for property registrations was recorded at 510, the highest in 12 months. The second half of the month saw a higher daily sign-up rate of 593 compared to the daily sign-up rate of 415 recorded between March 1 and March 15, 2022. This increase in momentum was due to an impending increase in costs associated with real estate transactions.

Moreover, the increase in the cost of raw materials due to the existing geopolitical pressure is also driving consumer sentiment, which anticipates a cascading effect on prices.

Mumbai’s property market has been booming ever since the state government announced a reduction in stamp duty rates in 2020 to revive the property sector and other related industries.

The reduction in stamp duty has led to an increase in the number of transactions in all segments, including luxury, middle-income and affordable housing. While the lower stamp duty benefit window period ended in 2020, property markets in Maharashtra’s major cities are still seeing robust activity.

Penny D. Jackson