Maharashtra State government carefully thinking to hike stamp duty by one more per cent.

Maharashtra State government carefully thinking to hike stamp duty by one more per cent.

Are you a prospective buyer looking to buy a property? Perhaps you need to rethink and recalculate the cost of the property as there is a likely chance of another hike in stamp duty soon! 

State government is carefully thinking of another hike in existing stamp duty on property transactions by one per cent. 

Buying homes in the State is likely to get costlier.

At present property buyers pay six per cent as stamp duty, five per cent as value added tax (VAT) and one per cent as local body tax (LBT) of property value. The LBT came into effect from April 1, 2013.

Government is expected to use additional revenue generated for funding mega projects like Pune Metro Rail and Mumbai Mono Rail.

During the span of last three years, amount of taxes that a home buyer pays has doubled making it even harded for prospective buyers to buy a flat.

Will this move drive away prospective buyers and real estate investors from the real estate market which is already facing the heat due to uncertain economic climate and policies?

More Pune Real Estate updates on Pune Real Estate News & Updates

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Pay more service tax on house costing over Rs 1 crore

Pay more service tax on house costing over Rs 1 crore



The finance ministry has tightened norms for application of lower rate of service tax on construction, dealing a blow to buyers purchasing houses above a certain size or value.

The Central Board of Excise and Customs, the apex indirect taxes body, has issued new norms that restrict lower service tax to only those houses that cost below Rs 1 crore and have carpet area less than 2000 square feet.

Service tax at the rate of 12% will be applicable on 25% of the total value of the residential unit (effectively 3%) on properties that meet these conditions.

If a housing unit is either more than 2000 square feet carpet area or costs over Rs 1 crore then the tax will be levied on 30% of the total value, says the CBEC notification, raising the effective tax to 3.6%.

Commercial properties will continue to attract higher incidence of tax, irrespective of size and value. The move comes at a time when the construction and the realty sector is already confronting lower off take and piled up inventory. The CBEC had earlier allowed application of the lower rate if any of the conditions was met.

Experts say absence of a definition of what constituted carpet area complicated the matters further. 

All under construction residential houses will face the new norm. As many as 4.5-5 lakh homes are expected to be delivered in 2013. More details here