When you buy a property, you need to pay stamp duty and registration charges to the state government. The goal of this fee is to register the property in the buyer’s name and maintain municipal records. Section 3 of the Indian Stamp Act makes payment of the legal possession of a property mandatory.
Before you purchase a property in Mumbai, read this article to learn about the registration charges and stamp duty you need to pay.
Stamp duty rates in Mumbai
Stamp duty and registration charges in Thane or for that matter, any part of Mumbai, are levied under the Maharashtra Stamp duty Act. During the pandemic, the Government of Maharashtra reduced the stamp duty to encourage buyers and boost the real estate sector. It was brought down to 2% to 3% of the property’s value. But, from April 2021, the stamp duty and registration charges were reinstated.
In a recent announcement on 01 April 2022, the government has decided to levy a 1% metro cess on stamp duty and registration charges in Thane, Pune, Nashik, Navi Mumbai, and Mumbai. The cess is applicable on sale, mortgage, and gift deeds. It is because these areas have operational metro projects or works in progress.
As per the current stamp duty and registration charges in Thane and other parts of Mumbai, men need to pay 5% of the property’s value, while women need to pay 4%. This includes the 1% metro cess.
Things to Remember While Paying Stamp Duty in Mumbai
As a property buyer in Mumbai, you must consider the following essential points prior to paying stamp duty in Maharashtra:
- The issuance date of the stamp paper should not be more than six months from the date of the stamp duty transaction.
- The stamp paper should be issued in the name of the individuals involved in the transaction.
- The asset must be stamped on the day after the execution date or before registration. Execution refers to the signature of the buyer and the seller on the agreement. If the property deed is executed outside the territory, there is a 3-month validity for stamping.
In Mumbai, a property buyer can pay stamp duty via adhesive stamps. These stamps are removed during execution to avoid reuse.
Factors Affecting Stamp Duty in Maharashtra
1. Property Owner’s Gender And Age
A few states give senior citizens concession on stamp duty. In Mumbai, women homebuyers can enjoy a 1% rebate on stamp duty. Thus, these two factors influence the calculation of stamp duty in a city or state.
2. Property Location
Within the municipal limits of an urban area, stamp duties are higher. Similarly, areas away from urban localities attract lower stamp duties.
3. Property Type And Use
The stamp duty and registration charges on residential properties are different from commercial properties. In Mumbai, the stamp duty for a commercial property is more than the stamp duty for a residential property. Besides, stamp duty differs for flat, independent homes and other property types.
4. Property Status And Amenities
The stamp duty in Maharashtra will always be higher if a property in any city offers high-end amenities like swimming pools, fitness centres, advanced security services or elevators. Another vital factor influencing stamp duty is the age of the property – is it new or old?
What are the Tax Benefits on Stamp Duty Payments?
Section 80C of the Income Tax Act, 1961 allows taxpayers to deduct expenses concerned with stamp duty and registration charges paid for the transfer of property. The maximum limit for the deductions is Rs. 1,50,000.
Summary
Before you buy a house, know that it comes with many challenges. There are several things that you need to take care of, including down payments, loan applications, execution of sale agreements, etc. After possessing the property, you need to complete registration, for which you need to pay stamp duty and registration charges to the state government. In Mumbai, it is possible to pay stamp duty online by following a simple process.