In its quest to promote real estate and promote the construction industry, the government of Maha Vikas Aghadi (MVA) has extended the period of stamp duty exemption for investors who sell their property within one year of purchase to take advantage of this exemption.
The corresponding bill was approved by the state legislature on Wednesday. However, investors may be exempt from stamp duty even in the event of a resale completed within three years of the purchase of their property. On such deals, stamp duty is paid only on the difference in the price of the property and not on the full amount.
It should be noted that according to the RERA Act, which enters into force in the state on 1 May 2017. It generally takes at least three years to complete a project within the conditions and rules of RERA Act.
In the current scenario, if an investor buys an apartment and wants to resell it within a year, a certain exemption from stamp duty is granted by charging only the price difference. The bill however states that the annual maturity has not allowed for a large profit from such a trade since the pandemic. The number of resale making such a profit is very negligible.
Encourages more investments and sale-purchase deals
The bill is based on the need to stimulate business in connection with the rapid development of the global economy and the post-pandemic situation.
If the annual period of validity of the permit is extended to three years, this privilege will used by a larger number of investors, according to the wording of the purpose of the bill. This decision would not only improve investment volume. But also speed up the signing of sales contracts, which would ultimately benefit the state’s large revenue from stamp duty.
Revenue minister Balasaheb Thorat said. Various reports from the real estate industry point to the losses they have suffered, especially in the post-COVID period. “This decision will encourage investors to enter into real estate transactions and in turn help the government generate revenue and create jobs.”
Builders can misuse this service
Experts from the cooperative sector and stamp duty sector also shared their opinion and said, “This could be a step towards pleasing builders and their investors. It is very possible that builders are financing politicians. We all know that the election is just around the corner. Hence there is a possibility that funds will be given to political parties.”
Vinod Sampat, president of the Registration Fee & Stamp Duty Payers Association said, “Builders also have the opportunity to abuse this service by selling apartments to their employees/assistants. As well as taking out home loans and using these funds for personal needs. Therefore, they can receive funds at a very low price. We all know that housing mortgage rates are much lower.