Be prepared to shell out 1% more if you buy a new house in Mumbai
The new BMC budget has proposed an additional 1% surcharge on anew property in the citymumbai Updated: Mar 30, 2017 11:18 IST
If you are looking to buy property in Mumbai, you may have to pay 1% more than what you would normally shell out. Brihanmumbai Municipal Corporation (BMC), in a bid to boost it’s revenue sources, proposed 1% surcharge on the value of property.
This means, in addition to the stamp duty and registration charges that you pay to the state government, BMC wants 1%. If you buy property worth Rs1 crore, you may have to pay Rs1 lakh as surcharge to the BMC, if the proposal is approved.
BMC, India’s richest civic body, slashed it’s budget allocation by 32.14% on Wednesday, which is deemed the biggest cut in its expenditure in history. The move comes in the backdrop of the Good and Services tax (GST), which will phase out the civic body’s biggest revenue generater — Octroi. BMC earns Rs7,000 crore annually from Octroi.
There were no new taxes or hikes in the budget.
At present, the state collects 5% of the value of the property as stamp duty and a registration charge of 1 per cent or Rs 30,000, whichever is less. So, if you have purchased property worth Rs1 crore, your total outgo will be Rs5.30 lakh for stamp duty and an additional one lakh as surcharge.
However, the surcharge proposal will require approval by the state government, which will have to be done through an amendment in the Stamp Duty Act. If the state approves the proposal, the amendment could take up upto one year.
The civic body hopes to mop up Rs3,000 crore from this additional surcharge. “Just as the state government increased the stamp duty by 1% to finance metro projects in October 2015, we are asking for a similar measure to fund infrastructure projects taken up by the BMC,” said Sanjay Mukherjee, additional municipal commissioner, projects.
However, sources in the state government said that it was not in favour of levying additional burden on citizens, given the slump in the realty sector. The state’s and BMC’s revenue targets from the real estate sector has not been met for this fiscal.
“We are expecting a compensation from the state to maintain revenue and maintain financial health,” said an civic official.