From 2011, state to levy stamp duty on carpet area only

Finally, there’s some good news for homebuyers. Starting next month, the state government will levy stamp duty charges based on the carpet area rather than the built-up area of each flat — a move that will slash stamp duty payments by about 20%. Naresh Kamath reports.

Finally, there’s some good news for homebuyers.

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Starting next month, the state government will levy stamp duty charges based on the carpet area rather than the built-up area of each flat — a move that will slash stamp duty payments by about 20%.

Carpet area is the actual usable area of an apartment — excluding walls, balconies, lifts and car parks, which are included in built-up and super-built-up area.

The new norms are part of a sustained but largely unsuccessful campaign by the state to push builders to sell flats based on carpet area alone.

“The move is aimed at correcting an anomaly,” said a senior official with the stamp duty office. “The state has been pushing builders to charge only for carpet area, yet we ourselves were levying duty on the basis of built-up area, which we felt was in conflict with our goals. Hence the change.”

The change will be ratified in the new Ready Reckoner — the government rate card for the realty industry — which will be unveiled on January 1.

Minister of State for Housing Sachin Ahir called the amendment a much-awaited move.

“It will really serve to bring transparency in the housing industry,” he said.

Meanwhile, rates as per the new Ready Reckoner are likely rise by 20%, as the government seeks to reflect the upward spiral in Mumbai’s realty market. This will also raise stamp duty charges.

Experts said the impending hike was justified.

“The current realty market is at an all-time high and the state should benefit,” said real-estate advocate Vinod Sampat.

Stamp duty is the second largest revenue earner for the state after sales tax.