Will property tax waiver on affordable houses bring relief to Mumbaikars?
The government had announced a waiver of property tax for residential houses measuring up to 500 sq ft, 60% waiver for units measuring 501-700 sq ft.
Maharashtra government's recent decision to waive off property tax for residential houses measuring up to 500 sq ft is expected to create positive sentiment on Mumbai’s property market. Experts believe that it would also help in the acceptance of compact homes within the limits of the BrihanMumbai Municipal Corporation (BMC). Dr Niranjan Hiranandani, President, National Real Estate Development Council (NAREDCO) told Zee Business online, "This will help create a positive sentiment in Mumbai’s property market as also impact acceptance of compact homes within the limits of the BrihanMumbai Municipal Corporation (BMC). It is estimated that around 64 per cent of the residential units within the BMC limits come under this category, this will boost buyer sentiment when it comes to affordable homes, and enhance the acceptance of compact homes measuring 500 sq. ft."
The government had recently announced a waiver of property tax for residential houses measuring up to 500 sq ft. Similarly, residential units measuring between 501 sq ft and 700 sq ft will benefit with a 60 per cent reduction in the tax rate. To qualify for this, the houses must be located within the limits of the BrihanMumbai Municipal Corporation (BMC). The waiver will be implemented with retrospective effect from January 1, 2019.
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The state government has also announced an amnesty for those Mumbaikars, whose stamp duty payment is deficient. For such homeowners, the state government has curtailed the penalty from 400 per cent to 10 per cent.
Balwant Jain, tax and investment expert, said, "The scheme proposes to limit the penalty payable on certain transactions to 10 per cent of the deficient stamp duty, instead of the 400 per cent which can be levied in the normal course by the government. The scheme can be availed of only with respect to inadequately stamped documents and cannot be availed of if no stamp duty has been paid at all for such instrument. However, for documents executed by government corporations like the Maharashtra Housing and Area Development Authority (MHADA), City and Industrial Development Corporation of Maharashtra Limited (CIDCO) and Slum Rehabilitation Authority (SRA), the benefits under this amnesty scheme can be availed of, even if no stamp duty has been paid on such documents."