Now no Stamp Duty for moving into Redeveloped flats:

Now no Stamp Duty for moving into Redeveloped flats:

In a chief relief for the residents, those are moving into the new flats after the redevelopment, the department of stamps and registration has ruled that they need not pay the stamp duty. The circular that is issued by Inspector General of Registration and Controller of Stamps says that the flat owners will save more over Rs 1 lakh.

The property market sources believed that the biggest beneficiaries will be developing the projects in the suburbs such as Ghatkopar, Mulund, Goregaon, Chembur, Andheri, Borivali, and Kandivali. Stamp duty for 2 BHK flat that is payable by each old member in a freshly constructed building was somewhat around Rs 1 lakh.

The developer also believes that the saving could be as much ad Rs 1.5 lakh for a 2 BHK flat in various suburban localities. The stamp duty is usually paid to the owner of the flat but in some of the cases, the developers take the responsibility of paying it. It completely depends on the agreement being signed between society and builder.

National Real Estate Development Council had been pushing with the department of stamps and registration since some time to remove the levy. It claims that the cases of the redevelopment projects, residents and builders were made to pay the stamp duty twice. The fresh circular pertains to pay the stamp duty in Permanent Alternate Accommodation Agreement between the flat owners, society and the developers.

In earlier days when this agreement was signed, the department imposed stamp duty. This charge is completely based on the construction cost for the rehab component, corpus amount for permitting utilization of transfer of the development rights paid to society, rent for the alternative or temporary accommodation paid to its members or to the society, brokerage as well as transportation charges for finding the alternative accommodation. On this basis, the stamp duty is calculated for the redevelopment agreement and the same is paid by a builder who is redeveloping the property.

When the developer is done with the project and hands it over the redeveloped building to original residents or inhabitants, another multilevel agreement is signed for new premises between the society, builder, and members. The department again would charge for the stamp duty on newly constructed buildings which is based on the cost of construction. The housing experts believe that that amounted to double dusty, this has been advising the department to abolish it.

National Real Estate Development Council said that the company had clearly pointed out the anomaly to the department. If the stamp duty on the construction cost is paid already then on redevelopment agreement, how can department charge again the similar stamp duty while the registration on the Permanent Alternate Accommodation Agreement with the earlier or old members. And moreover, why would the old members pay such a huge amount again on the stamp duty?

As per the circular, the stamp duty on new premises or homes will clearly be applicable as per the provisions of sector 4 of the Maharashtra Stamp Act. The price varies between Rs 100 to Rs 1000 for each of the new flats.