An additional 1% cess will be levied on all property purchased from April 1 in Mumbai, Pune and Nagpur. Maharashtra state government planning to impose Metro cess from April this year.
The stamp duty on property registration in Mumbai would go up to 6% from the current 5% after the metro cess is introduced. It would be 7% of the property’s value in Pune, Nagpur and Thane from April 1, after the additional cess comes into effect.
The 1% Metro cess is expected to augment revenues of the Metro rail services and service the loans that funded the Metro project. It is intended to be used for funding transport infrastructure projects like Metro, bridges and flyovers in the state.
The burden might be shifted to the homebuyers resulting in a flunk in the sales of the properties. With uncertainty in markets owing to the ongoing conflict between Russia and Ukraine war, there is a possibility of a significant impact on the Indian market, which will eventually affect the real estate industry.
The decision of charging metro cess of 1% will crumble the budget of the prospective homebuyers. Pritam Chivukula, co-founder & director, Tridhaatu Realty and Treasurer, CREDAI MCHI, criticises the decision.
A 1 percent metro cess on property registration is a good move by the Maharashtra government to fund transport projects. The decision could have been deferred as home buyers have become very price-savvy in recent past, an expert says. However, it will severely impact the decision-making power of home buyers.
An additional 2 percent in the form of a new 1 percent cess minus 1 percent stamp duty exemption will delay the decision-making time of a home buyer by at least two to three months. This will affect demand-supply dynamics in the MMR and Pune markets.
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