In a significant development for the housing sector, the state government of Maharashtra has announced a major reduction in stamp duty for existing flat owners participating in self-redevelopment projects. As per the recent government resolution issued on Friday, flat owners will now only have to pay a nominal fee of Rs 1,000 as stamp duty, as opposed to the previous rate that varied between 5-7% of the total agreement value of the property.
The decision aims to promote self-redevelopment projects throughout Maharashtra, particularly benefiting housing societies that are approximately 30 years old. Previously, flat owners in such projects were burdened with significantly higher stamp duty costs, which have now been drastically reduced to just Rs 1,000. This move is expected to provide a much-needed financial respite to flat owners and encourage more participation in self-redevelopment initiatives.
Advocate Shreeprasad Parab, director of the state housing federation, explained, “Flat owners in such projects were made to pay around 5-7% of the market value depending on the city and district as stamp duty, which has now been reduced to just Rs 1,000.” This favorable revision in stamp duty rates will enable more flat owners to consider self-redevelopment as a viable option for upgrading and rejuvenating their housing societies.
The self-redevelopment of aging housing societies has emerged as a crucial solution for providing affordable housing in major cities like Mumbai, Thane, and Pune. By empowering existing residents to undertake the redevelopment process themselves, it eliminates the need for third-party developers and reduces the overall cost burden. It also allows residents to customize the redevelopment plans according to their specific needs and preferences.
Suhas Patwardhan, vice-president of the state housing federation, praised the government’s decision, stating, “The 2019 government resolution on self-redevelopment had called for a single-window system to clear such proposals too. This also should be in place along with the reduced stamp duty.” Implementing a streamlined approval process would further facilitate and expedite self-redevelopment projects, boosting their overall success rate.
While the reduced stamp duty rate is applicable to existing flat owners within self-redevelopment projects, it’s important to note that homebuyers purchasing apartments from the open market in such projects will still be subject to the prevailing market rate for stamp duty. This ensures fairness and equitable treatment for all parties involved.
Deputy Chief Minister Devendra Fadnavis had previously instructed the state administration to expedite the implementation of the self-redevelopment policy, which was approved by the government in 2019. This recent reduction in stamp duty aligns with the government’s commitment to supporting and promoting self-redevelopment initiatives as an effective means of addressing the housing needs of Maharashtra’s residents.
Consumer organization Watchdog Foundation has applauded the reduction in stamp duty for self-redevelopment projects. However, they have called for further reduction to a nominal fee of Rs 100. Advocate Godfrey Pimenta of the foundation emphasized, “Several projects will go for self-redevelopment if the stamp duty is reduced to Rs 100.” Their demand highlights the potential for increased participation and further growth in self-redevelopment projects if the stamp duty rates are revised even lower.
The state government’s decision to reduce stamp duty for existing flat owners in self-redevelopment projects is a positive step towards facilitating affordable housing solutions and empowering residents to revitalize their communities. By offering financial relief and incentivizing participation, this move encourages sustainable urban development and sets a precedent for similar initiatives across the country.
