Pawar deals a blow to rental housing
The rationalisation of stamp duty by the state government in its annual budget presented by finance minister Ajit Pawar will result in tenants, especially those renting high-end apartments and commercial establishments, paying more for registration of their leave-and-license agreements.mumbai Updated: Mar 21, 2013 01:39 IST
The rationalisation of stamp duty by the state government in its annual budget presented by finance minister Ajit Pawar will result in tenants, especially those renting high-end apartments and commercial establishments, paying more for registration of their leave-and-license agreements.
According to experts in the real estate sector, the rationalisation of 0.25% of rent would only result in burdening the tenants who are already reeling under high rentals. The additional 0.25% stamp duty on 10% of rental deposit is only going to make the situation worse.
This means that if you rent a flat for a year at monthly rent of Rs10,000 and pay Rs1 lakh deposit, the stamp duty payable would be 0.25% on Rs1,20,000 rent, and 0.25% on Rs10,000 (interest calculated at 10%).
Commercial premises, many of whom are rented out for above Rs20 lakh per annum will now have to pay a stamp duty of Rs27,500 instead of Rs5,000 which was the amount earlier. Tenants of residential premises will also feel the heat as most times the landlord makes them pay the stamp duty.
According to Ramesh Prabhu, chairman of Maharashtra Societies Welfare Association, it is a harsh step. “People opt for rental houses as they cannot afford to purchase flats and instead of promoting rental housing, the state is only making things harder for them,” said Prabhu.
Till now, tenants paid meagre amounts as stamp duty and the payment was determined on the basis of slabs. While the annual rent within Rs2.50 lakh attracted just Rs600, now the hike has ensured that the tenant coughs up Rs875 to the state government. Similarly, the tenant has to pay Rs1,500 which till now he had to pay just Rs1,200 if the annual rent exceeds Rs2.50 lakh.
According to noted lawyer Vinod Sampat, a major pinch would be felt by high-end users and those renting commercial premises. “The commercial market, which is already in doldrums, will suffer further with this step,” said Sampat.
Tenants are also anguished. “The cost of living is already prohibitive and now the state has further aggravated the situation,” said Ugesh Ganeshi, who is living in a rented flat at Goregaon.