As you stand dreamily in front of your “soon-to-be” home, you create all different scenarios of a happy place. If only homeownership is as easy as dreaming about living in it, this is not the reality. When it comes to buying a real estate property in Maharashtra, understanding financial obligations and their associated legalities is crucial. Among the primary considerations are stamp duty and registration charges, which are pivotal aspects of real estate property transactions in Maharashtra.
Everyone knows that buying a real estate property comes with lots of legal paperwork before your home is registered under your name. Unfortunately, there is no escape from this grappling legal procedure, as it is fundamentally rooted in real estate property transactions. However, an informed buyer must be educated about different legal procedures, like stamp duty rates and registration charges involved during real estate dealings.
This blog aims to unravel the complexities of these legal procedures, focusing on stamp duty and registration charges in Maharashtra.
Understanding Real Estate Property Legalities in Maharashtra
Every state has its property laws, and as a citizen, you are subject to them. Every home buyer falls under the purview of the state’s property laws, as every state has unique legal procedures due to its demographics and economic market differences.
Every buyer must pay a certain tax amount during a property transaction to the state government, which is called stamp duty and registration charges. The Maharashtra Stamp Act governs both stamp duty rates and registration charges.
Acquiring knowledge about stamp duty and registration charges is vital for the buyer to make informed decisions while navigating the intricacies of real estate more adeptly. These aspects can significantly impact the overall property costs.
Stamp Duty in Maharashtra
The Maharashtra state government levies a stamp duty tax on the execution of various legal documents, including property-related agreements, conveyance deeds, etc. It is governed by the Maharashtra Stamp Act (also known as the Bombay Stamp Act 1958), which specifies all necessary information about the assets, legal instruments, and amount that is to be paid to the government. All the legal instruments are thoroughly mentioned in Agenda 1.
Features of Stamp Duty in Maharashtra
1. Property type
The stamp duty rates differ for different types of real estate properties, like residential, commercial, agricultural, business, etc. The rates for residential properties may vary with different residential categories. Some buyers look for a dwelling purpose, while others may treat it as an investment. The government charges higher stamp duty rates on revenue-generating commercial properties like office spaces, retail spaces, or any industrial space. The rates for agricultural land are comparatively lower.
2. Property location
The location of the real estate property impacts the stamp duty rates in Maharashtra. Several factors, like local dynamics, property market conditions, etc., exert influence. The urban areas have higher stamp duty rates due to higher property values and better infrastructure than the rural areas. Local administrative policies change with different regions in Maharashtra as they implement local schemes like reduced rates for certain types of properties. Also, prime locations offer superior amenities and industrial hubs, which bring variations in stamp duty rates.
3. The characteristics of a person
The government facilitates affordable housing for senior citizens or retirees by offering concessions in the fees. They also provide attractive stamp duty rates for female homebuyers to encourage gender equality in property ownership. The government may dedicate to women a specific quota, offering concessions or exemptions during property acquisition. Also, economically weaker sections may benefit from certain exemptions under government schemes.
4. Age of the property
The saying “Old is Gold” stands true when the stamp duty rates for the old real estate property are concerned. There is a reduction in the stamp duty rate if you gain capital on the old property. However, for the new property, the government charges comparatively higher rates.
Registration Charges in Real Estate Property Dealings
Home buyers pay registration charges to register the concerned property documents with the government authorities. These charges and stamp duty rates are separate.
A newly bought real estate property needs proper legal recognition. While the stamp duty rates focus on demographics and geographic locality aspects, registration charges ensure the legal ownership of your real estate property.
Calculating registration charges in Maharashtra
- Calculating registration charges involves the higher value of either the market value or transactional value. The market value is the price the property would fetch in the real estate market. The transaction value is the agreed-upon price between the buyer and seller.
- The registration charges in Maharashtra are generally 1% of the property’s market value or the transaction value.
- The registration fee also includes a nominal charge for the issuance of the registration certificate.
Recent Amendments to the Stamp Duty Act and Registration Charges in Maharashtra
To ease homeownership for buyers and boost the real estate sector, the Maharashtra government made a few positive amendments that could elevate people’s interests and encourage them to make real estate property investments.
Recent updates include:
- The government scrapped a 15-year lock-in period for women homebuyers to avail of a 1% rebate on stamp duty charges. Women can now sell their properties without losing out on the rebate.
- The government will open 27 new offices of the Inspector-General of Registration (IGR) Maharashtra to facilitate real estate property registrations in Mumbai, Thane, Pune, Nagpur, and Nashik.
- The rates for Ready Reckoner will remain the same for 2023–2024.
- The government will continue offering a 1% discount on stamp duty rates to female home buyers.
- The Maharashtra government will offer a one-time 50% stamp duty concession for integrated township projects approved in 2018.
Despite seeing a temporary reduction in the rates of stamp duty from August 2020 to March 2021, the rates remain unchanged from 2022, with percentages ranging between 6% and 7% depending on the cities.
The following tables will provide valuable insights about different stamp duty rates and registration charges as of today, also highlighting the updates.
Stamp duty rates in Maharashtra
| Locations in Maharashtra | Stamp Duty in Maharashtra (for men) | Stamp Duty in Maharashtra (for women) | Property Registration Charges in Maharashtra |
| Within the limits of any panchayat, municipal council, or cantonment area within MMRDA | 4% | 3% | 1% |
| Within the limits of any Gram Panchayat | 3% | 2% | 1% |
| Within the municipal limits of any urban region | 6% | 5% | 1% |
Stamp duty rates and registration charges for different cities in Maharashtra
| Cities in Maharashtra | 1st Sept 2020 – 31st Dec 2020 | 1st Jan 2021 – 31st Mar 2021 | From 1st April 2020 (for men) | From 1st April 2020 (for women) | Registration charges |
| Mumbai | 2% | 3% | 6%, including 1% metro cess | 5%, including 1% metro cess | Rs. 30,000 for the properties above 3 lakhs |
| Thane | 3% | 4% | 7%, including 1% metro cess, transport charge, and local body tax | 6%, including 1% metro cess, transport charge, and local body tax | 1% of the property value for the properties below Rs. 30 lakh |
| Pune | 3% | 4% | 7%, including 1% metro cess, transport charge, and local body tax | 6%, including 1% metro cess, transport charge, and local body tax |
Gift deed stamp duty rates in Maharashtra
| Conveyance deed | Stamp duty rate |
| Gift deed stamp duty in Mumbai and other parts of Maharashtra | 3% |
| Gift deed stamp duty for residential or agricultural property passed on to family members | Rs 200 |
| Lease deed | 5% |
| Power of attorney | 5% for property located in municipal areas, and 3% for property located in gram panchayat areas. |
Important Considerations for Investors
- Paying the stamp duty fees and registration charges within a stipulated time is the buyer’s responsibility. Otherwise, you will be penalised.
- Ensure proper compliance with the stamp duty fees and registration charges before finalising any real estate property transaction.
- The state government keeps revising the property laws periodically. Be vigilant of these laws whenever you are conducting real estate property dealings.
Conclusion
Prospective home buyers and sellers must consider these legalities before making any transactions to avoid any legal complications. While this blog post provides an overview of the stamp duty rates and registration charges in Maharashtra, it is imperative to consider your financial obligations towards any updates to new policies and amendments. This is your time to be financially prudent while dealing with a real estate property.