MCD plans to increase duty on property transfers

NEW DELHI: The sale of properties in Delhi is likely to get costlier as the unified Municipal Corporation of Delhi (MCD) plans to increase the rate of duty on the transfer of properties valuing over 25 lakh by one percentage point. At a meeting on Tuesday, the special officer and MCD municipal commissioner gave initial approval for the increase.

The proposal will need approvals including from the Delhi government to come into force. The transfer duty is calculated on the registered sale value of a property.

An MCD spokesperson explained that if the proposal is accepted, the MCD’s share in transfer duty will increase from the existing 3% to 4% in the case of male and from 2% to 3% that of women buyers.

In the transition phase for the MCD, the Centre-appointed special officer holds the power of both the standing committee as well as the house of councillors. “At the meeting held on Tuesday, the approval for the standing committee stage has been granted,” the spokesperson said.

An MCD official said both the erstwhile South and North Delhi Municipal Corporations attempted to increase the transfer duty but the proposal remained stuck at the Delhi government level. “East MCD never approved the proposal for an increase in the transfer duty. The move also aims to bring uniformity in the policy,” said an official.

In September 2020, the erstwhile South Delhi Municipal Corporation approved the proposal moved by commissioner Gyanesh Bharti to increase the transfer duty. Bharti also holds the position of commissioner of the newly-constituted unified MCD.

Civic officials say there will be no change in transfer duty for properties of the registered value of less than 25 lakh. “If a property costs around ₹1 crore, the net increase in transfer duty will be 1 lakh. The transfer duty has not been increased in the last decade and the corporation has the power to levy up to 5% transfer duty,” the official said.

The transfer duty constitutes one of the biggest sources of income for the corporation.

A second official said the ongoing financial crisis was one of the key reasons behind the unification of the three corporations and various steps are being explored to increase the revenue collection of the unified MCD.