Reduced Stamp Duty for Home buyers in Maharashtra

The Maharashtra state government is planning to reduce stamp duty on smaller houses in Mumbai and other parts of Maharashtra. This is a relief for people who own residential properties that are less than the area of 750 sq. ft and the potential home buyers who are planning to buy properties in Maharashtra as the state government plans to help economically weaker, lower income and middle income groups.

The stamp duty rates will be justified with 1% tax for residential properties for the economically weaker sections, 2% for the lower income group houses and 3% of the agreement value for the middle income group houses. However, the people belonging to the higher income groups and the home buyers in search of better properties will continue to pay the standard stamp duty as applicable at present.

Currently, the stamp duty applied on ready reckoner property rates is found to be 5% as specified by the government or the existing market rate, whichever is higher. The state government’s draft housing policy, which has proposed these amendments, has defined 

• The EWS (economically weaker section) houses as residential properties spread over an area of 269 sq. ft.
• LIG (Lower income groups) Houses spread over 270-538 sq. ft
• MIG (middle income groups) houses as 539-753 sq. ft.
• However, any property area measuring beyond these mentioned figures will be defined as the HIG ( high income group).

The registration charges will also be reduced to the standard Rs. 1000 per transaction against the current applied tax of Rs. 25,000. For the HIG houses, the ready reckoner rates are revised every year, depending upon the weighted average of the transactions observed in the previous financial year. Hence, for people who are looking forward to invest in residential properties in Maharashtra should be aware of the existing stamp duty rates before they finalize any property for the end use.