February Stamp Duty Collections in Mumbai Real Estate Market Highest on Record, as Property Transactions Expected to Rise in 2023

February Stamp Duty Collections in Mumbai Real Estate Market Highest on Record

Despite Challenges

Despite a rise in interest rates and property prices, stamp duty collection in February for the country's biggest and most costly real estate market, Mumbai, reached a record high. The record collection was driven by premium and middle-income housing categories, according to statistics from the Maharashtra inspector general of registration.

Growing Numbers

The number of property registrations in the city increased by 6% in February to 9,537, while the exchequer's earnings from stamp duty collections increased by 60% to INR 1,103 crore, according to statistics.

While the number of registrations decreased by 8% year-over-year, stamp duty collection increased by 80% and by 153% from February 2019 to February 2020. With the declaration in the budget that the deduction for capital gains on residential property investments would be restricted to INR 10 crore, tax collection increased.

Desire for RTMI housesAccording to real estate developers and property brokers in Mumbai, the demand for ready-to-move-in (RTMI) houses with occupation certificates (OCs) is growing at both the inquiry and sales conversion levels. With the budget statement about long-term capital gains on residential property investments, this is particularly true among luxury and premium homebuyers trying to reduce their tax burden.

As per real estate developers in Mumbai, walk-ins at luxury properties increased by 50 to 60 percent in February, 2023 driven mostly by investors seeking capital gain savings. The number of luxury real estate transactions has grown with the implementation of this restriction on April 1, 2023.

A surge in the average value of properties registered in February 2023 generated substantial money for the state treasury from property registration. This month, the average value of properties registered was INR 1.9 crore, which is a 65% increase from INR 1.18 crore a year before. In addition to the value increase, the metro cess has contributed to the increase in income.

All of these variables led to a decade-high average daily revenue collection of INR 39 crore for the month of February. This is an indication of the buoyancy of the middle- and upper-tier markets, which continue to demonstrate resilience amid challenges.

Although the luxury and premium housing segments have performed well, increasing interest rates have begun to harm the inexpensive housing market.