State saw 35% rise in revenue from stamp duty, registration in 2022-23

The state government has mopped up a whopping ₹43,289 crore in stamp duty and registration, about 35% more than its ₹32,000-crore target set for the 2022-23 financial year. Officials attribute the surge in revenue to the buoyancy of real estate market, which was brought in after the government and developers announced various initiatives, and a rise in the metro cess. At the same time, they are sceptical if the rally will continue in 2023-24 in the backdrop of about 25% hike in the EMI.

After the market registered a slump during the pandemic, the state announced waiver in stamp duty (2020-21) and metro cess (2021-22). This resulted in record registration and revenue collections in the last three financial years - ₹25,651 crore in 2020-21 against the target of ₹21,000 crore; ₹35,171 crore in 2021-22 against the target of ₹29,000; and 20% more than the target in 2022-23.

Shravan Hardikar, inspector general of registration, said, “We saw the advance payment of the stamp duty at the beginning of the year as home buyers wanted to take advantage of the waiver. Also, people are now preferring larger, safer, and better houses in MIG and HIG categories. The rise was evident especially in tier-1 cities like Mumbai and Nagpur and tier-2 cities like Nashik and Amravati,” he said, adding this trend may or may not continue in the current financial year.

However, the volume of registration of flats has declined in the last few months. Between December and March, the number of documents registered has been either similar to the corresponding period in the previous financial year, or there is a reduction.

“It is because of the rise in the repo rate by 2.5% in the last 10 months. This has increased the payout towards EMI, thus discouraging the new buyers. To bank on anticipation that the repo rate is expected to go down in the next few months, the potential buyers are expected to put their plans on hold for a while, resulting in a dip in revenue collection,” an official from the revenue department said.

Besides, the official said, the decision to not increase the ready reckoner rate for 2023-24 would lead to a drop in revenue. “But we are proposing an amendment to the Maharashtra Stamp Act to raise the value of the bond papers to ₹500 from the existing ₹100. It will help us collect more revenue this year.”

Pankaj Kapoor, managing director of real estate research firm Liases Foras, said the buoyancy in 2022-23 could not be witnessed in 2023-24. “It is because of the discounts and offers by developers during and after Covid-19 and by the government in terms of fungible FSI and stamp duty waiver. There was no hike in the prices of properties from 2016 to 2021, but the last one year has seen a rise by 10%. At the same time, the interest rate has gone up by 15%, taking the overall impact to 25% on the EMI over the past few months. This has resulted in a dip of around 2% in registration of properties in the last two quarters. It will continue for the next couple of quarters as well,” he said.