Tax on slums, big outlay for water and infrastructure
In a move that could further hit the real estate market, BMC has proposed to levy a 1% surcharge on all property transactions and even in cases where a property is gifted. The civic administration said it will yield additional revenue of Rs3,000 crore if the surcharge is approved by the state government. The buyer will have to shell out Rs 1 lakh on an apartment worth Rs 1 crore.This is over and above the 5% stamp duty (Rs 5 lakh on a Rs 1 crore flat) and Rs 30,000 for registration. BMC has requested the state to amend the Maha rashtra Stamp Act and BMC Act to introduce the surcharge. As of now, the state collects stamp duty and registration charges; it collected Rs 20,000 crore across the state in 2016-17. Property experts raised concerns about the new surcharge, stating it will dampen sentiments. "The market was already affected badly in the quarter post-demonetization," said sources. Sudip Mullick, partner with the construction practice of Khaitan & Co said, "Residential sector particularly is suffering a negative sentiment. Purchasers are also scared that developers will mark up prices because of the new real estate act (RERA) to cover or hedge their risks. Any additional stamp duty implication would further dampen the spirit of buyers, including investors. BMC has its own stream of revenues and should augment those than venture into new territory." Advocate Vinod Sampat said the proposal is an attempt to tax the rich without providing any extra services. "Small corporations, zilla parishads do levy tax on purchase of flats as they have a limited budget and the state has allowed them.But one fails to understand why BMC wants to levy a tax when it is not even able to utilise the existing amounts collected by it. Even corpo rators are not able to spend the amount allotted to them," he said.
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