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For owners of MHADA flats, it’s time to pay up

The state revenue department recently amended the Stamp Act making it imperative for owners of MHADA-constructed flats since 1987 to pay stamp duty.

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If you are planning to avoid stamp duty by purchasing a flat constructed by the Maharashtra Housing Area Development Authority (MHADA), it’s time to do a rethink.

The Stamp Duty and Registration Department has decided to lift the exemption on stamp duty on flats sold by the public housing body. The state revenue department recently amended the Stamp Act making it imperative for owners of MHADA-constructed flats since 1987 to pay stamp duty.

Since the amendment — aimed at filling the state’s diminishing coffers — was passed  stamp duty officials have been busy preparing a list of 5,000 people (the first purchasers) on whose name MHADA had issued allotment letters for flats worth over Rs 300 crore. “Notices will then be sent to them to pay stamp duty,’’ said SS Shinde, deputy collector, Stamp Duty and Registration Department, who has received a circular to start levying duty from the state revenue department.

Earlier, flat owners of MHADA buildings did not have to pay stamp duty at the time of purchasing or transferring a flat in another person’s name. Stamp duty was payable only when MHADA conveyed (transferred) the property in the name of a co-operative housing society (CHS) formed by flat owners.

The move has received mixed reactions. MHADA officials believe it will end the long-pending dispute with housing societies over transferring of properties. Like private developers, MHADA charges a certain sum for transferring the property to the societies.

MHADA residents believe the non-conveyance hampers them from functioning as an independent society. They cannot redevelop the building if it is old till they get MHADA (landowner’s) permission. Added to this problems like high maintenance costs also add to their woes.

But there is another aspect, says KR Kamat, a resident of Oshiwara. “MHADA’s information booklet of its various housing projects till date, does not mention that it is mandatory for flat owners to pay stamp duty,’’ said Kamat.

“I came to know of the rule recently when the Stamp Duty and Registration Department refused to register my sale documents,’’ he added.

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