The Maharashtra government has approved a significant reduction in stamp duty for registering 99-year lease agreements of cooperative housing societies in Mumbai, a move expected to benefit thousands of societies that have faced difficulties completing registrations due to high costs and procedural delays.
Revenue Minister Chandrashekhar Bawankule announced in the Maharashtra Legislative Assembly on July 7 that stamp duty on residential lease agreements has been capped at 0.5%, while commercial properties will attract a maximum duty of 1.5%, according to a PTI report. Earlier, stamp duty on such agreements could go up to 5%, depending on factors such as lease terms and premium amounts.
The revised policy applies to cooperative housing societies situated on leasehold land and is expected to help both existing societies seeking to regularise pending lease agreements and newly formed societies completing registration formalities. Officials said the concession will be applicable across Mumbai city and suburban areas, offering financial relief to societies in locations including Nariman Point, Colaba, Cuffe Parade, Marine Drive and several suburban neighbourhoods.
Highlighting the impact of the decision, Bawankule said the stamp duty payable by Mittal Chambers Owners Cooperative Society in South Mumbai would drop from approximately Rs 101.21 crore to around Rs 10.68 lakh. Similarly, New Maker Chambers’ liability would reduce from nearly Rs 119.47 crore to Rs 1.76 crore. Sea Lot Cooperative Housing Society in Colaba would pay about Rs 27.05 lakh instead of Rs 176.82 crore, while Abhilasha Premises Society’s duty would decline from around Rs 104.83 crore to Rs 19.45 lakh.
Lease agreements play a crucial role in Mumbai’s property market, as a large number of cooperative housing societies are built on leasehold land owned by government bodies, public authorities or private entities. Registering these agreements is essential for establishing legal ownership, obtaining redevelopment approvals, securing loans and carrying out property transactions.
Under a leasehold arrangement, apartment owners own their individual units, while ownership of the land remains with the lessor. Unlike freehold properties, the housing society does not receive absolute ownership of the land through a conveyance deed. In Mumbai, leasehold land is commonly owned by agencies such as MHADA, CIDCO, MMRDA and, in some cases, private trusts.
Government officials said the reduction in stamp duty is expected to support Mumbai’s growing redevelopment activity by lowering upfront costs. “Lower stamp duty is expected to reduce upfront costs for real estate developers, thus improving the financial viability of redevelopment projects, particularly for older buildings where residents already face significant expenses,” a revenue department official, who did not wish to be named, said.
Source: Hindustan Times
