Principal secretary of the urban development department, Bhushan Gagrani, on Friday said 1% metro cess would be levied on property purchases from April 1 in Pune, Mumbai and Nagpur, reports Nisha Nambiar.
The stamp duty on property registration in Mumbai would go up to 6% from the current 5% of the asset’s value after the metro cess is introduced. It would be 7% of the property’s value in Pune, Nagpur and Thane from April 1, after the additional cess comes into effect.
Property buyers currently pay 6% stamp duty in these three cities. The 1% metro cess would be a transport surcharge. It is intended to be used for funding transport infrastructure projects like Metro, bridges and flyovers.
The property registration officials stated that they were waiting for the order to implement the metro cess from April 1. “The restriction on imposition of the metro cess ends on March 31. If the state government is keen to implement it, a directive would be issued for the same,” an official said.
A source said the state government was facing a severe cash crunch and so it was likely to levy the metro cess from the next financial year.
The realtors’ organisations had urged the state government not to charge the 1% metro cess for property purchases immediately.
Credai national vice-president Shantilal Kataria said they would reach out to the government to reconsider the proposal. “The cities that are seeing transactions are Pune, Mumbai, Nagpur and Thane. Unfortunately, these are the cities where the metro cess would be levied.
This is not a healthy situation for all, including the government, developers and buyers. The decision of charging metro cess of 1% will collapse the budget of the purchaser, who will, in turn, delay the purchase. Subsequently, the government will not achieve its revenue target. The government should think of reducing the stamp duty for a few months.”
Citizens’ groups, too, sought deferment of levying the cess as homebuyers would have to pay more upfront.