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Selling Propert Made Easy In Maharashtra ?
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With the Maharashtra Budget deciding to ease the norms for property sale, it is likely that the supply will improve.
In a move that could help property investors to exit the market in Mumbai, the Maharashtra State Budget has recently declared that now you need not hold the property for "at least" three years to take advantage of the concession on stamp duties.
That is in case a property was sold before three years, the buyer would have to pay a stamp duty, based on the entire sale agreement price.
However, by reducing the time frame, now a buyer will get the concessional advantage, even if the property is just one year old. Clearly, it was believed that long-term speculation in the property market should not be encouraged.
Also, the entry of "any person" from "investor" is rather important because to sell a property, you had to run around for a certificate to establish that you were an investor in property (defined as someone who buys property, but not self use) and not a genuine home buyer.
But with property becoming an important part of asset allocation, there are a large number of people who have purchased second and third houses. Therefore the clause has been amended to "any person" from investor in the recent budget.
Let us take an example to explain the new guidelines.
If you had bought a property in the year 2003 for Rs 25 lakh and sold it before 2006 for say, Rs 40 lakh, the stamp duty was payable on the entire sale price.
This, despite the fact that you had paid stamp duty on purchase and the profit was Rs 15 lakh. But if you held on to the property for three years, the stamp duty was imposed only on Rs 15 lakh.
The main reason for reducing the time period for availing concession on stamp duty according to us is to reduce the time period of speculation.
Given that the overall scenario this year does not look very optimistic because of the apprehension of a severe recession in the United States. Even the Indian stock markets are suffering. In such a scenario, a move like this would help the investor to exit earlier from his investment in property and save on stamp duty payment.
In a move that could help property investors to exit the market in Mumbai, the Maharashtra State Budget has recently declared that now you need not hold the property for "at least" three years to take advantage of the concession on stamp duties.
That is in case a property was sold before three years, the buyer would have to pay a stamp duty, based on the entire sale agreement price.
However, by reducing the time frame, now a buyer will get the concessional advantage, even if the property is just one year old. Clearly, it was believed that long-term speculation in the property market should not be encouraged.
Also, the entry of "any person" from "investor" is rather important because to sell a property, you had to run around for a certificate to establish that you were an investor in property (defined as someone who buys property, but not self use) and not a genuine home buyer.
But with property becoming an important part of asset allocation, there are a large number of people who have purchased second and third houses. Therefore the clause has been amended to "any person" from investor in the recent budget.
Let us take an example to explain the new guidelines.
If you had bought a property in the year 2003 for Rs 25 lakh and sold it before 2006 for say, Rs 40 lakh, the stamp duty was payable on the entire sale price.
This, despite the fact that you had paid stamp duty on purchase and the profit was Rs 15 lakh. But if you held on to the property for three years, the stamp duty was imposed only on Rs 15 lakh.
The main reason for reducing the time period for availing concession on stamp duty according to us is to reduce the time period of speculation.
Given that the overall scenario this year does not look very optimistic because of the apprehension of a severe recession in the United States. Even the Indian stock markets are suffering. In such a scenario, a move like this would help the investor to exit earlier from his investment in property and save on stamp duty payment.
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