CREDAI-MCHI's Plea for Stamp Duty Reduction
On Tuesday, the real estate body CREDAI-MCHI formally requested the Maharashtra government to implement a stamp duty reduction to 2 percent in Mumbai. This measure, they argue, is crucial for reviving the housing demand that has been dampened by the ongoing COVID-19 pandemic. The organization directed separate letters outlining this request to key government figures, including Maharashtra Chief Minister Udhav Thackeray, Finance Minister Ajit Pawar, and Deputy Chief Minister and Revenue Minister Balasaheb Thorat.
Impact of Previous Stamp Duty Reduction and Current Decline
The association highlighted the significant positive impact of the Maharashtra government's 2-3 percent stamp duty reduction implemented in September 2020, a measure which expired in March of this year. CREDAI-MCHI emphasized the subsequent slowdown in housing sales and the drastic reduction in stamp duty revenue collected by the state government as evidence of the need for renewed intervention.
The organization, boasting over 1,800 developer members, has urged the government to reinstate and further reduce the stamp duty to 2 percent in Mumbai by March 2022. They pointed out the continuing downward trend in the real estate market and the reluctance of many prospective buyers due to elevated transaction costs.
CREDAI-MCHI acknowledged the remarkable boost provided to the sector by the earlier stamp duty reduction in August 2020. However, they stressed that the decision against extending this relief beyond March, combined with the impact of a second wave of the pandemic, has resulted in exceptionally subdued buyer sentiment. This, in turn, has caused a significant drop in revenue generation for the authorities, with property registration and stamp duty collection seeing a 70 percent decline in May compared to figures from March.
Concerns Over Market Slowdown and Impact on Related Industries
Deepak Horadia, president of CREDAI-MCHI, stated that the association had initially called for an extension of the stamp duty cut beyond March to sustain industrial and economic recovery. "However, we have seen a strong downward trend in inquiries and sales in recent months. Which not only hampers the sustained progress made in the real estate sector but also the more than 250 aid industries that come into play." Goradia further emphasized the importance of the state government recognizing the necessity of reinstating the stamp duty reduction to rebuild homebuyer confidence and enhance its own revenue collection.
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