[UPDATE] Real Estate Simplified: Stamp Duty and Registration Charges in Mumbai
Stamp duty and registration charges in Mumbai remain one of the biggest sources of revenue for the state government of Maharashtra. In fact, the government has been banking on Mumbai’s real estate boom to fuel growth and development.
In March 2015, the Maharashtra government decided that stamp duty need not be paid on the transfer of immovable property — land, house or flat — to one's own children or blood relatives. For such transfers, the total stamp duty, including local taxes is Rs 200. "As per Article 34 of the Maharashtra Stamp Act, for Gift Deed of Agricultural or Residential property and is in favour of Husband, Wife, Son, Daughter, Grandson, Granddaughter or Wife of deceased son of property within the limits of the Mumbai Municipal Corporation, the total stamp duty, including local taxes is Rs 200," says the website of the Department of Registration and Stamps, Maharashtra.
Stamp duty on gift deed in Maharashtra
A gift deed in favour of any other family member, however, attracts stamp duty at the rate of 2 per cent of the transaction value. Similarly, 5 per cent of the transaction value is charged as stamp duty if a gift deed is signed in favour of someone outside of the family.
But, the Maharashtra state government had hiked the ready reckoner rates on January 1, 2015. The average hike in the ready reckoner rates in the Mumbai municipal corporation area is 14.81%. In Maharashtra, on average, the hike was 14%. This is the lowest hike in the recent past. Usually, the hike in ready reckoner rates is in the range of 10-30%. According to the new rates, stamp duty in Mumbai would be 5% of the ready reckoner rate or the market value, whichever is higher. The registration charges would be 1% of the value of the property or Rs 30,000, whichever is less, according to the Mumbai City Collectorate website. Earlier, the registration charge on residential property per transaction was Rs 25,000 across the board.
For homeowners who redevelop their property, the fee is calculated based on the extra space available after reconstruction, and not on the existing specifications of the property.
On property purchases, a home buyer has to pay five per cent stamp duty and one per cent or Rs 30,000 (whichever is less) of the total flat value to the state government. This is mandatory for every sale and purchase of the property.
How much stamp duty and registration charges you need to pay in Maharashtra?
To put it in a nutshell, for residential property transactions done until December 31, 2014, the registration charges were Rs 25,000. From January 1, 2015, onwards, this can go up to Rs 30,000. The stamp duty is charged at a standard 5 per cent across Maharashtra.
How to calculate stamp duty and registration charges on your property?
The purchaser has to enter into an agreement with the seller of the flat and the stamp duty is computed as per the agreement value. The agreement value should not be less than the ready reckoner rate, or the guideline value as fixed by the government. In certain cases, the agreement value can be the market value, but whichever is higher is taken for stamp duty computation. Once the stamp duty amount is computed, the purchaser has to take a pay order in favour of the Stamps and Registration Department. Finally, the parties have to be duly present and sign the agreement before the registrar for completing the property transaction.
Suppose you buy a 200 sq m flat near Dr Homi Bhabha Road in Colaba, where the Ready Reckoner rate for residential property is Rs 2,64,200 per sq m. Assuming the property's agreement value is the same as the Ready Reckoner Rate in the locality, your property price calculation will be as follows:
|Suppose you buy a 200 sq m flat near Dr Homi Bhabha Road in Colaba|
|A. Area of the flat||200 sq m|
|B. Ready Reckoner Rate||Rs 2,64,200/sq m|
|C. Price of flat (AxB)||Rs 5,28,40,000|
|D. Stamp Duty (5% of C)||Rs 26,42,000|
|E. Registration fee |
(1% of C or 30,000, whichever is less)
|F. Total cost (C+D+E)||Rs 5,55,12,000|
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