Covid, rollback of stamp duty dent Mumbai residential sales: Knight Frank

Mumbai recorded upwards of 10,000 residential property registrations in April but only 7 per cent of these registrations were from new residential sales while the rest were transacted between December 2020 to March 2021 for which applicable stamp duties were paid during the lower rate window.

Knight Frank India said there had been a sharp pick up between September 2020 to March 2021 during the 7 months of concessional stamp duty window. Hence, when the state government reverted to the previous stamp duty regime, sales momentum was expected to moderate post March 31.

"But the fall in momentum has been exacerbated by second wave of Covid-19 and the ensuing lockdown," it said.

The Maharashtra state government in December 2020 had given a leeway of four months to homebuyers to register a property after the payment of stamp duty in order to prevent crowding of registration offices.

This ensured that homebuyers who had purchased residences and paid stamp duty on or before March 31 have maximum window of four months till July 31 from the respective date of payment of stamp duty for registering their apartment.

On March 8, to celebrate International Women's Day, the Maharashtra government announced a one per cent rebate in stamp duty for women homebuyer effective from April 1. As a result, women home buyers constituted 6.6 per cent of new home sales in April paying a discounted stamp duty rate of 4 per cent over their purchase.

Shishir Baijal, Chairman and Managing Director of Knight Frank India said the residential real estate sector had shown a healthy bounce back in the last few months backed by reduced stamp duty, contributing greatly to the state's exchequers.

"The demand stimulus provided by the state helped the sector inch back providing employment and economic stability. This thereby proved that the stamp duty sop was a master stroke that kept the sector and indeed the state economy buoyant during the country's prolonged fight against the pandemic."

In April, as the government withdrew the reduction in stamp duty coinciding with the second wave of pandemic resulting in a virtual lockdown, demand and sales of new homes was severely impacted."We sincerely feel that the state government at an opportune time should reconsider measures to reinvigorate demand such as reduction in stamp duty to bring back the momentum and help the sector tide over the crisis," said Baijal.

( With inputs from ANI )