Mumbai: Property registrations at all-time high in December – ET RealEstate

Property registrations in Mumbai, the country’s biggest real estate market, have broken all records as the unprecedented rush among the homebuyers continued in the backdrop of all-time low home loan rates, attractive price discounts and reduction in stamp duty charges.

Registration of residential sales in the country’s financial capital rose 192% from a year ago in December so far to 18,794 deals.

This performance is 217% higher than the pre-Covid month of February and up 102% from November, showed the data from the office of the Inspector General of Registration Maharashtra.

ET had reported on December 18 that the performance in December had already broken all the monthly records in just the first half of the month and was expected to close with the highest numbers ever. November month’s performance itself was an 8-year high record number.

“We are witnessing record growth in registration of deals and given the rush all of our 26 sub-registrar offices are working beyond working hours and even on holidays to facilitate smooth operations and allow homebuyers to get the benefit of government’s reduced stamp duty,” Shridhar Dube-Patil, deputy inspector general of registration, Mumbai division, told ET.

According to him, any homebuyer who pays the complete stamp duty on the executed documents by the end of December 31 office hours will be able to register the document within the next four months without any additional charges to get the benefit of the government’s decision.

The property registration across Maharashtra has touched 2.42 lakh deals in December so far with stamp duty revenue collection of Rs 2,099 crore. In December 2019, the state had witnessed 1.09 lakh deal registrations with revenue of Rs 1,786 crore.

Given the latest average of around 1,000 registration per day in Mumbai and one more day to go, the number for the entire December is expected to top 20,000 easily.

Interestingly, the stamp duty revenue collection has also risen nearly 20% from a year ago to Rs 646 crore despite the reduction in stamp duty rates. Stamp duty revenue has witnessed a 124% jump from November when the collection stood at Rs 288 crore.

In August, the government of Maharashtra had announced reduction in stamp duty on property registrations to 2% for transactions between September 1 and December 31 from 5% earlier.

The stamp duty will be 3% for agreements to be registered between January 1 and March end.

Following this announcement, real estate transactions in Mumbai, Pune and other urban pockets of the state have been witnessing a sharp jump. The registrar had to keep all 26 Mumbai offices open on all Saturdays to accommodate the higher number of deals.

The government has also started to operate registration offices in two shifts as against one shift operation that had started during Covid19 period.

In Mumbai, all registration offices now commence operations at 7 AM and close at 9 PM as against the timing of 10AM to 5:30PMsince the outbreak of Covid19.

Apart from helping converting pent up demand in the mid-income and affordable segment, the stamp duty reduction has been driving several large-ticket transactions in the city and the trend is expected to pick up further.

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One per cent of stamp duty allocated to Mumbai, Pune and Nagpur metros – ET RealEstate

MUMBAI: One per cent of all stamp duty levied on sale and purchase of property in Mumbai, Pune and Nagpur will go towards completion of metro projects in those cities, the government has announced.

The decision comes in the middle of a pandemic-induced slowdown, when all major infrastructure projects in the state are struggling to raise funds.

A notification issued by the Urban Development Department on September 10 said as per the Mumbai Municipal Corporation Act, 1888, and Maharashtra Municipal Corporation Act, 1949, 1per cent of the revenue will be collected by the Stamps and Registration Department and given for Mumbai, Pune and Nagpur metro rail projects. The additional charge will be applicable on all property deals from February 8, 2019, it said.

The government is studying different fundraising models for major infrastructure projects, a department official said. “The stamp duty levied on property will help the projects immediately. The emphasis will be on continuing the projects and completing them within the deadline.”

Mumbai Mirror had reported on September 4 that the Mumbai Metropolitan Region Development Authority (MMRDA) was struggling to raise funds for the metro project. If loans of Rs 29,000 crore do not come through in the next six months, the MMRDA may have to withdraw its fixed deposits of Rs 13,000 crore to fund big-ticket projects.

The planning agency has Rs 1.25 lakh crore tied up in 12 metro corridor projects, including around Rs 60,000 crore in seven under-construction lines and three that are in different stages of planning. Another key project is the Mumbai Trans Harbour Link, estimated to cost Rs 23,000 crore and likely to be completed by 2022.

All of these infrastructure projects are capital intensive. Sources said that on average, the annual expenditure on the projects as well as human resources and ancillaries touches around Rs 7,000 crore.

Pune Metro, which will connect Pune Central and the areas of Pimpri and Chinchwad, is targeted for operations by the next year. Its estimated cost is of Rs 11,420 crore. Nagpur Metro Rail Project will consist of a 38.215-km corridor, 38 stations and 2 depots. It is estimated to cost Rs 8,260 crore and is expected to be completed by 2021.

The stamp duty is the largest revenue earner for the government, after GST and sales tax and VAT. In 2019-20, the state earned Rs 29,500 crore through stamp duty. In 2020-21, it expects to raise only an additional Rs 500 crore.

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