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ShareMumbai: Revenue minister Narayan Rane's decision to lift the stay and levy a registration fee of 1% of the market value on all documents will once again clamp down the city's property market that had grudgingly begun raising its head, builders and property experts said. The decision, which is yet to get the formal nod of the state cabinet, will effectively mean a hike in stamp duty from 5% to 6%, they added.
"After the euphoria of the past few months, during which the developers hiked the rates, the property market is now starting to find its real level. I cannot put a percentage to it, but a large number of customers in the high-end property market, who had booked flats, are requesting the developers for the refund of the 5% token amount," Pranay Vakil, chairman of Knight Frank, said.
Acme Group's Pravin Doshi, who is also president of the Maharashtra Chamber of Housing Industry, said that the hike in registration fee did not augur for the sales that had been just picking up. "It is an arbitrary decision by the government, and will have an overall impact on property prices. The government took a good decision to increase the floor space index in the suburbs from 1 to 1.33, but that is now stuck in the courts," he said.
Consumer activists too slammed the government. Stating that the fee was not a tax, but an amount charged for preserving documents, they asked the government not to think of registration fee as a means of collecting revenue.
Rane took the decision at a meeting on Monday, effectively doing away with the Rs30,000 ceiling. The decision, if implemented, will see the state revenue increasing by Rs250 crore, taking it closer to the target of earning Rs9,600 crore from stamp duty in 2009. Currently, the government has earned Rs8,000 crore from stamp duty. Former revenue minister Patangrao Kadam had taken the decision to levy a flat 1% charge on property registrations early this year, but it was stayed in lieu of the assembly elections.
