Mumbai civic body can charge 1% more stamp duty to fund infra projects
This provision in the Mumbai Municipal Corporation Act was passed in the lower house on TuesdayUpdated: Nov 28, 2018 08:15 IST
The state assembly on Tuesday cleared an amendment in the Mumbai Municipal Corporation Act that authorises the Brihanmumbai Municipal Corporation (BMC) to levy an additional one per cent on stamp duty as surcharge, to fund major urban transport projects. The state government expects the move – which will make buying property more expensive for Mumbaiites – to generate more than ₹1,000 crore in revenue.
This provision in the Mumbai Municipal Corporation Act was passed in the lower house on Tuesday during pandemonium concerning the Backward Class Commission report, which recommends reservation for the Maratha community. The amended bill states the BMC may levy an additional surcharge of one per cent on stamp duty. The revenue generated from this will be used to fund projects like the Metro, the monorail, freeways and other public transport systems. The bill will now be placed before the legislative council for approval. Once approved, stamp duty (excluding registration fees) in Mumbai will increase to six per cent of the property transaction amount, which means buying real estate will become more expensive for Mumbaiites.
Nitin Kareer, principal secretary, state urban development department, said, “A similar provision has already been made for funding Metro projects coming up in cities such as Pune and Nagpur.”
Chief economist and national director of the property consultancy Knight Frank India, Samantak Das said that the timing of the amendment was not ideal.
“Any sort of increase in taxes or stamp duty is an additional burden for all buyers. At a time when the real estate industry is observing some kind of traction, coming back after so many years, I think this will not augur well as far as buyers and sales are concerned,” Das said.
Even though the Maharashtra government is facing a cash crunch, it has begun work on expensive projects in Mumbai like nine Metro corridors, the coastal road and the Versova Bandra Sea Link (VBSL), which will cost more than ₹1 lakh crore.
Many of these will be funded with loans from international funding agencies, but the state must give funds as viability gap funding (VGF).The state recently sought special grants of ₹50,000 crore from the 15th Finance Commission to complete Mumbai’s infrastructure projects.
First Published: Nov 28, 2018 01:07 IST