Mumbai is the financial capital of India. Its economic importance, ever-growing population, and the scarcity of available land, creates a unique market dynamic that makes real estate in Mumbai a profitable business where you can invest.
The city’s status as India’s financial hub attracts a steady influx of businesses, multinational corporations, and professionals. Thus, the demand for commercial spaces is high, and investors owning such properties benefit from high rental yields, as businesses are willing to pay a premium price for office spaces.
More importantly, Mumbai attracts people from all over India, driven by the promise of job opportunities and better living standards. This means that the city’s population is constantly growing, which creates constant demand for residential properties. Therefore, you get not only high rental yields, but also long-term appreciation of the property value, making it a valuable investment opportunity.
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GST rate applicable for affordable housing segment is 1% of such property.
GST rate applicable to Under-construction residential properties, is 5% of the property value.
No GST is applicable on completed or ready-to-sale properties, if the Completion Certificate has been issued.
An affordable residential apartment is one in which:
Carpet area is up to 60 square meters for metropolitan cities;
Carpet area is up to 90 square meters for cities and towns other than metropolitan cities.
The gross amount charged by the builder is not more than Rs.45 lakh.
Stamp Duty:
A stamp duty is a kind of tax that is levied on the transactions concluded by way of documentation or instruments. The tax was sealed by the Bombay Stamp Act (1958).
As per the regulations of this Act, the buyer must pay a 6% stamp duty on the cost of the flat. This payment is a pre-requisite for the full ownership of property.
Once the buyer decides to purchase a residential property, the stamp duty is calculated according to the agreement value or the market value, whichever is higher.
Registration:
The process of registration involves the submission of transaction documents (copies) to the required governmental officer for preservation. Once the stamp duty has been paid on a document, it has to be registered under the Indian Registration Act (1908) with the Sub-Registrar of Assurances of the locality of the property. Unless this procedure is completed, the investor does not have full ownership of the property.
The original copy as well as two photocopies of the document must be submitted to the Sub-Registrar of Assurances. The procedure also includes a registration fee for properties costing more than Rs. 30,000/-, which is fixed at 1% of the market value or the agreement value, whichever is lower. Once again the value is subject to change. The procedure can only be completed under the presence of two eye-witnesses.
