The shares of most real estate companies fell on the domestic stock exchanges on reports that the state government of Maharashtra will announce an increase in stamp duties in Mumbai.
According to a report, the state government might increase the stamp duties in the city to a whooping 160 times for residential and commercial properties. The prospects for the companies in the sector in the country's financial capital could turn negative if the proposal to increase the duty in accepted by the state government. The government is reportedly considering imposing a 0.1 stamp duty on the market value of residential properties.
Mumbai real estate companies like Indiabulls, Oberoi, HDIL and even Bombay Dyeing, Raymond will face the pinch of the increased duty. The increase will affect prices of leave-and-licence residential as well as commercial properties.
Experts say that the move will hugely impact investor sentiment, as it will have an adverse impact on demand for residential property in Mumbai. Housing Development and Infrastructure Ltd fell 4.5 percent, while DB Realty dropped 4.8 percent, and Indiabulls Real Estate lost 3.22 percent. Oberoi Realty is down 0.5 percent on the stock change.