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The Maharashtra government has exempted stamp duty and registration fees for existing residents moving into 400-600 sq ft homes under Mumbai's cluster redevelopment programme. Through a directive by the Inspector General of Registration and Controller of Stamps, the combined area original, additional, and fungible will now be valued at a concessional rate (112 times the rent or a lower rate) instead of full construction or ready-reckoner cost. This move could save up to INR 4.36 crore in large projects and is aimed at boosting stalled cluster redevelopment work. Critics suggest the timing ahead of civic elections raises political questions.
The Maharashtra government has announced that registration fees and stamp duty will be waived for certain homes in Mumbai's cluster redevelopment projects. The exemption applies to units between 400 sq ft and 600 sq ft that are allotted to existing tenants or residents shifting into newly redeveloped buildings under the scheme. This decision was formalised by the Revenue Department, following approval given to the Inspector General of Registration and Controller of Stamps. Advertisement
Under the old system, residents were charged full stamp duty on the extra carpet area they gained after redevelopment based on either the construction cost or ready-reckoner rates. Now, the valuation will include the original carpet area, the additional area granted under redevelopment norms, and the 'fungible' area (extra permissible construction), and all of this will be assessed at a concessional rate. The rate used is 112 times the rent, or any lower rate applicable.
According to the Development Control and Promotion Regulation (DCPR) 2034, each cluster redevelopment resident is guaranteed at least 35 sq m of carpet area. Beyond that, depending on cluster size, they can receive between 10 % and 35 % more, plus an additional 35 % fungible area. All of this additional space will now be treated as 'replacement area' (in exchange for their old housing) and valued more modestly for stamp duty calculations.
The financial benefits are significant. In a smaller redevelopment project covering about 4,000 sq m, the new valuation could lead to savings of around INR 21.14 lakh in stamp duty. For a much larger cluster say 50,000 sq m the waiver could go up to approximately INR 4.36 crore.
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