Workers climb up a wall at a Maharashtra Housing and Area Development Authority (MHADA) low-cost residentail building in the Kurla area of Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Stamp Duty Surcharge In Mumbai Only A Temporary Hurdle, Mahindra Lifespace Says

Mumbai property developers will only face a temporary impact from the stamp duty surcharge, said Sangeeta Prasad, managing director and chief executive officer of Mahindra Lifespace Developers Ltd.

“Any kind of duty addition does have an impact. People do look at it negatively,” she told BloombergQuint in an interview. “But with the market and our end user focus, we should be able to attract the right customer and in the long run it will do good for the state,”she said.

The government, earlier this week, approved an amendment to the Mumbai Municipal Corporation Act, allowing 1 percent surcharge over and above the 5 percent stamp duty and 1 percent registration fee on ready properties. For under-construction apartments, buyers have to pay 12 percent goods and services tax—taking the total levy to 19 percent of the cost of an apartment. The increase in stamp duty comes when defaults by IL&FS group have dried up liquidity for non-bank lenders, the key source of funds for property developers.

However, Prasad is not worried about the additional duty. Roll-out of the Mumbai Development Plan 2034 and the transition policy are much more important issues to look forward to, she said.

Watch the full conversation here.