The New Year is expected to bring in bad news for home buyers in Mumbai. Their dreams of buying a home in the city might just get dearer in 2010. According to sources from the realty sector, the ready reckoner property rates - on which a buyer pays stamp duty - are likely to rise by 10-15% from January next year.
The ready reckoner, which is an annual document that is published by the registration and stamp duty office, lists property rates and information about the real estate market.
Also, come 2010, the stamp duty will be calculated on carpet area of the home bought and not the built-up area. This effectively means that an additional burden of 10-15 would be is levied on the buyers.
DNA contacted Sunil Samdadeiya, sub-registrar and administrative officer (city), who said that he did not know about the new rates as the proposal was yet to be finalised and was being discussed with the state town planning department.
According to revenue officials, the state government was keen on the hike as the income from stamp duty barely touched 50% of the targeted Rs5,075 crore that had been fixed for 2009-10. Till September 2009, the state had collected Rs2,302 crore against the one lakh documents that were registered.
“That was barely 45%. Keeping the recession in mind, we had not increased the property rates in 2009 and had continued with the rates of 2008. The economy is now booming and in the past six months we have seen people buying property. So, we believe it could be the right time to hike the rates marginally,” a revenue department official said.
The government in 2008-09 had earned revenue of Rs4,223 crore against registration of 1.75 lakh documents when the target for the year was Rs6,165 crore. In 2007-08, the government had a target of Rs4,000 crore and it had earned Rs4,406 crore against 1.75 documents that were registered.
Vinod Sampat, president, Registration Fee and Stamp Duty Payers Association, said that buyers must also register their agreements. “If the government hikes the reckoner rates, the buyer will not only have to shell out additional amount for stamp duty but also pay higher registration fee, which is proposed to be revised by 1%. Also, the sellers will also have to shell out higher capital gains tax,” Sampat added.
Brokers see the hike in the stamp duty rates as a discouraging sign for home buyers and also feel that it may see a rise in the black (cash) component of a property transaction. “When the property market was going through turbulent times, buyers were not ready to purchase. But, post the Lok Sabha elections when developers started to increase the rates, people were rushing to buy. I don’t understand the logic,” Harendra Pandya, a Dahisar-based real estate broker, said. “Currently, there are no resale flats available. If the government hikes the registration fee and reckoner rates, flats sales are bound to see a dip in 2010,”
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