Stamp duty and registration charges in Mumbai

[ecis2016.org] We examine the cost that buyers have to bear as stamp duty and registration charges in Mumbai

As Mumbai is one of the most expensive property markets in the world, buyers must factor in all the allied costs, before moving ahead with a property purchase plan. Among these costs, the stamp duty Mumbai and registration charges, add significantly to the home purchase amount. Hence, buyers must know how much money is to be paid during property registration.

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Stamp duty on property purchase in Mumbai

With an aim to provide an impetus to the realty sector in the Maximum City, which has been battered by the ongoing Coronavirus pandemic, the Maharashtra government, on August 26, 2020, lowered the stamp duty on property purchases across the state, albeit for a specified period.

While the state has lowered the stamp duty on property purchases from the existing 5% to 2% till December 31 2020, the applicable charge will be 3% from January 1, 2021 to March 31, 2021. Thus, the Mumbai stamp duty cut will be effective only for a seven-month period, after which the standard 5% stamp duty will be applicable.

This is the second time that the state cut stamp duty on property registrations in Mumbai. In March 2020, Maharashtra reduced the stamp duty by 1% in Mumbai, along with Pune.

Stamp duty in Mumbai

(As percentage of the property value)

Registration charges in Mumbai

While buyers have to pay 1% of the property cost as the registration charge on properties worth over Rs 30 lakh, the registration amount is capped at Rs 30,000 for properties worth less than that.

Unlike many states, where women buyers are offered a lower rate, women buyers have to pay the same rate as men, for Mumbai stamp duty and registration charges. This is because Maharashtra uses a uniform rate, irrespective of the gender of the person on whose name the property is being registered.

Also read our article on the cost of living in Mumbai.

How is the stamp duty rate calculated in Mumbai?

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Buyers have to pay the stamp duty based on the transaction value as specified in the sale agreement. Note here, that a property cannot be bought or sold below the government-prescribed ready reckoner (RR) rates in Mumbai. This means, the property value must be calculated based on the current RR rates and the stamp duty must be calculated accordingly. In case the house is being registered at a value higher than the RR rate, the buyer will have to pay the stamp duty on the higher amount. If the property is being registered at a value less than the RR rates, the stamp duty will be calculated as per the ready reckoner rates.

Stamp duty calculation example

Suppose you are buying a property of carpet area of 800 sq ft in an area where the RR rate is Rs 5,000 per sq ft. The RR-based value of the property would be 800 x 5000 = Rs 40 lakhs.

If the property is being registered at Rs 40 lakhs, the buyer will pay 2% of this amount as stamp duty, i.e., Rs 80,000.

If the property is being registered at an amount lower than that, the buyer will still have to pay 2% of Rs 40 lakhs as stamp duty, as the property cannot be registered below the RR rate.

If the property is being registered at Rs 50 lakhs, the buyer will have to pay 2% of Rs 50 lakhs as stamp duty, i.e., Rs 1 lakh.

How to pay stamp duty online in Mumbai?

Home buyers can pay stamp duty and registration charges for property registration online in Mumbai, as the state allows e-payment of stamp duty.

The payment of stamp duty and registration fee can be done through the Maharashtra stamp and registration departments, Government Receipt Accounting System (GRAS).

Users can log on to the website, https://gras.mahakosh.gov.in, provide all the property and personal details and make the online payment using various channels.

Here is a step-by-step process to do that:

Step 1: Select the ‘Pay Without Registration’ option, if you are not a registered user. A registered user can key in the login details to proceed.

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Step 2: If you choose the ‘Pay Without Registration’ option, a new page will appear where you have to select ‘Citizen’ and select the type of transaction.

Step 3: Select ‘Make Payment to Register your Document’. You have the option to pay stamp duty and registration charges together or separately.

Step 4: Key in all the required fields to proceed. This would require filling in of the district, the sub-registrar’s office, property details, transaction details, etc.

Step 5: After selecting the payment option, proceed with the payment. After this, an online receipt will be generated. This document must be presented at the sub-registrar’s office at the time of the property registration.

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