MUMBAI: Mumbaikars will soon have to pay 1% additional stamp duty on property to fund transport infrastructure projects in the city, like metro and mono rail, bus rapid transport system (BRTS), freeways and sea links.
The state called it a surcharge that is a percentage of the land/property value. It will push up property stamp duty to 6% from the current 5%, making buying flats costlier in the city.
The bill amending the Municipal Corporation Act to allow the enabling provision was passed in the legislative assembly on Tuesday without discussion. In fact, eight bills were cleared amid the din over reservation for the Maratha community. The bill will now go to the Council and the governor before it is signed into a law.
In its statement of reasons, the bill said “it is considered expedient to levy a surcharge by way of the stamp duty leviable on the instruments of sale, gift and usufructuary mortgage of immovable property within BMC” to ensure the corporation or agency undertaking notified Vital Important Urban Infrastructure Projects has sufficient funds.
Usufructuary mortgage is when the mortgagor hands over possession to the mortgagee till the repayment is done. Officials said such transactions were negligible in the city.
The government will pay the corporation or agency that has undertaken the notified project a grant-in-aid approximately equal to the amount realised by the surcharge. The money is to be used for the project in a manner specified by the government.
Recently, the Mumbai Metropolitan Region Development Authority (MMRDA) had asked the government to provide funds by levying surcharge on stamp duty or increasing the premium on floor space index (FSI) for funding the transport projects. It is implementing various metro projects, besides the Mumbai Trans Harbour Link, etc. It had sought the financial aid on the plea that its land bank is drying up.
The 1% additional levy has been in place under the other urban local bodies after the Local Body Tax was abolished in 2015. Officials said Mumbai alone was not taxed.
Across the state, 21.5 lakh documents were registered last year and the revenue earned was Rs 26,500 crore. In Mumbai, about 2 lakh documents are registered annually and last year, the revenue earned was Rs 10,500 crore. This year, given the recession in the real estate industry, the target has been lowered to Rs 10,000 crore for Mumbai and to Rs 24,000 crore across the state, said officials. Senior officials TOI spoke to could not offer an immediate estimate of the increase in the state’s earning.