The government of every state in India levies a tax on the transactions made on property. These taxes are collectively known as ‘Stamp Duty’. Similar to sales and income tax collected by the government, stamp duty is generally charged on the present agreement value of the property or its market value, whichever is higher. For the government of Maharashtra, in particular, stamp duty and property registration charges act as one of the greatest sources of revenue.
Here are a few quick facts about stamp duty and property charges to guide you better through your property buying journey in Maharashtra –
1. Stamp Duty and Registration Charges in Mumbai – According to a bill passed in November 2018, the Municipal Corporation of Mumbai levies a 1 percent surcharge on stamp duty for the property buyers in the city. As a result, the total stamp duty which a property buyer in Mumbai pays is now six percent higher than it was before the bill was passed. Apart from this, an additional Rs. 30, 000 has to be paid as the registration charge.
2. Stamp duty on gift deeds – As decided by the government of Maharashtra in March, 2015, you don’t have to pay the stamp duty on the transfer of properties such as land or flat to someone you are related to by birth. When a property is transferred between relatives, a stamp duty of Rs 200 is levied, which includes all the local taxes. However, the State Legislative Assembly on August 10, 2018 passed an amendment to increase the stamp duty on these kinds of gift transfers to 3 percent of the market value of the property, which was soon revoked by the cabinet of the government of Maharashtra.
3. Factors affecting the stamp duty – There are several factors affecting the percentage and value of stamp duty in Mumbai. They include –
· Type of property – If the property is used for commercial or residential projects.
· Usage of property – If it’s an independent house or an apartment.
· Location of the property – If the property is situated in a local, suburban, urban or metropolitan area.
· Status of the property – If the property is new or old.
· Age of the owner – The gender and age of the owner.
4. Ways to pay stamp duty – There are three ways of paying stamp duty –
· Franking – In this process, a printed agreement on paper is submitted to any sanctioned bank. After the submission, documents are scanned using a franking machine.
· Stamp Paper – All the details of the agreement are written on the paper, which is then signed by the executants involved after the validation has been completed. After 4 months, the document is registered at the sub-registrar’s office. This process takes long and hence, is not favourable for many property owners and buyers.
· E-Stamp - Thanks to the era of digitalisation, stamp duty can also be paid online. In this method, one can easily pay stamp duty online through NEFT or RTGS.
If you are planning to buy any new projects in Goregaon East or Mumbai, it is important to consider stamp duty as one of the major costs to keep in mind.