Understanding Pune Property Taxation in pune. (Part 1)

Pune, the cultural capital of Maharashtra, has seen tremendous growth in the property market in recent years. With the rise in demand for residential and commercial properties, the government has implemented various taxes on real estate transactions. In this blog, we will discuss the different taxes applicable to real estate transactions in Pune.

Property Tax:
Property tax is a tax levied on the owner of the property by the municipal corporation. The tax is calculated based on the property’s area, location, and other factors. Tax is payable every year and non-payment of property tax can result in a penalty. The municipal corporation uses the property tax revenue to maintain the city’s infrastructure and services, such as roads, sewage, and water supply. There are various types of taxes that are imposed when buying a property as well as after that.

Stamp Duty:
Stamp duty is a tax levied on the property’s sale agreement or conveyance deed. It is payable by the buyer of the property, and the rate varies from state to state. In Pune, the stamp duty rate is 6% of the property’s market value or the transaction value, whichever is higher and 1% service charge is added to it. Failure to pay the stamp duty can result in the cancellation of the property’s sale agreement or conveyance deed.

Goods and Services Tax (GST):
GST is a tax levied on the sale of goods and services in India. In the case of real estate, GST is applicable to under-construction properties or properties that don’t have a completion certificate issued. The GST rate is 5% for affordable housing and 12% for non-affordable housing. The tax is payable by the buyer of the property and is included in the property’s cost

Property Tax:
Property tax is a fixed payable amount that has to be paid by the owner every year, on the property after purchasing it. Property tax is calculated based on the ready reckoner rates which are used to calculate stamp duty by the revenue department. Capital value is calculated as the product of base value, built-up area, usage, building type, age factor and floor factor.