Mumbai Realty stocks tank on stamp duty hike

Business

oi-Sunil

By Sunil Fernandes

Published: Monday, March 26, 2012, 13:42 [IST]

Shares of Mumbai based realty companies tanked today, after reports that the Maharashtra government proposes to hike the stamp duty rates. Shares of HDIL fell 4.16% at Rs 90, while India Bulls Real Estate was down 3% at Rs 66.30 and Phoenix Mills was trading lower by 2.59% lower at Rs 206.50, at 1PM IST.

Other Mumbai based realtors that saw their stocks take a beating were Oberoi Realty, DB Realty and Orbit Corporation.

The Maharashtra government is planning to hike stamp duty on leave and license properties to 0.1% on market value or 1% of the average annual rent or deposit paid, whichever is higher, for residential properties. For commercial properties, the duty proposed is 0.4% for lease agreements over 60 months.

Real estate sales over the last few quarters have not been doing well and the proposed hike by the Maharashtra government does not augur well for real estate companies in Maharashtra. Some of the real estate players have already been saddled with huge debt on their books, while there have been transparency and governance issues as well.

High interest rates have also affected volumes badly.

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