Maharashtra government extends period for stamp duty waiver for investors

In its efforts to boost real estate deals and encourage construction business, the Maha Vikas Aghadi (MVA) government has extended the period for a waiver in stamp duty for investors who would sell their properties within a year of buying them to earn the benefit of the waiver.

The bill related to the same was passed by the state legislative assembly on March 23. With this, the investors can earn stamp duty waiver even on a resale made within three years of the purchase of their property. On such deals stamp duty is payable only on the price difference of the property instead of the whole amount.

It may be mentioned that as per the RERA Act, that came into effect in the state from May 1, 2017, normally it takes minimum three years to complete the project as mandated under the conditions and regulations under the RERA Act.

In the present scenario, if any investor buys a flat in an apartment and goes for its resale within a year's time, a certain waiver is given in the stamp duty by charging it only on the price difference.

However, the bill cited that since the period of one year did not help earn much profits through such a deal post the pandemic, the number of such resales that have earned any such benefit is absolutely negligible.

Meanwhile experts in cooperatives and stamp duty sectors said, "This could be a move to please builders and their investors. It is quite possible that builders are funding politicians. We all know that elections are round the corner and there is a possibility of funds being contributed by builders to political parties."

"There is also a possibility that builders will misuse this facility by selling flats to their own staff/ well wishers and avail housing loans and may use the said funds for personal use. In this way they can get funds at a nominal cost. We all know the rate of housing loans is much less. Suppose if the rate in 2022 is say Rs. 30,000/- and in 2025 it is Rs. 32,000/- then additional stamp duty @ 5% will have to be paid only on the difference of Rs. 2,000/-," said Vinod Sampat, President of the Registration Fee & Stamp Duty Payers Association.

The bill suggests that due to fast changing global economy and the subsequent pandemic situation, it is necessary to encourage the businesses.

If the period of one year for any waiver to be earned is extended upto three years, such a benefit will be availed by a larger number of investors, suggested the statement of purpose of the bill. The decision will not only enhance the amount of investments but will boost the sale-purchase deals, eventually benefiting the huge revenue that the state earns through the stamp duty, it added.

The bill also suggests that the move will encourage the construction business and eventually bring in more job opportunities for the youths in the state.

Revenue Minister Balasaheb Thorat while explaining the purpose of bringing the bill in the house said that several representations made by the real estate industry indicated at the losses they were making especially in the post covid period. "The decision will encourage investors in boosting up the real estate deals in turn helping the state generate revenue and employment," he added.

Source: content.magicbricks.com

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