First published on Mondaq
Update: Effective 1st April 2022, Surcharge @1% on Sale, Gift and Usufructuary Mortgage in Brihan Mumbai Municipal Corporation Areas
Through the Mumbai Municipal Corporation (Second Amendment) Act, 2018, the Maharashtra Government levied 1% (one percent) surcharge on instruments of sale, gift and usufructuary mortgage in addition to the prevailing stamp duty and registration charges. However, due to the COVID-19 pandemic, effective from 1st April 2020, the Maharashtra government waived the surcharge for a period of 2 (two) years vide order dated 28th March, 2020.
Given that the duration of the waiver ends on 31st March 2022, effective 1st April 2022 onwards, surcharge at 1% (one percent) on the value of the property transactions in case of an instrument of sale or gift, and on the amount secured by the instrument in case of usufructuary mortgage, shall be levied in the areas of Brihan Mumbai Municipal Corporation (“Areas”).
Impact on sale, gift and usufructuary mortgage
a. Sale – This amendment hikes government levies in addition to stamp duty applicable to sale of immovable properties in the Areas; thereby increasing the cost of acquisition of such immovable properties.
b. Gift – This amendment raises government levies in addition to stamp duty applicable to gifts of immovable properties in the Areas, thereby affecting the gifting of residential and agricultural properties including inter-se transfers between husband, wife, son, daughter, grand-son, grand-daughter, wife of deceased son etc. which will substantially impact the usual, family customary transactions pertaining to the gifts.
c. Usufructuary mortgage – This amendment hikes government levies in addition to the stamp duty applicable on the amount as secured and set forth in the instrument. This will impact the transactions of borrowing and other financial transaction, involving mortgage, due to increase in costs.
– Siddhant Marathe (Associate)