Key Highlights: Maharashtra Waives Stamp Duty to Boost Enemy Property Auctions
- Policy Initiative: Maharashtra government waives stamp duty and registration charges on enemy property transactions to stimulate sluggish auctions and attract more buyers.
- About Enemy Properties: Assets left behind by people who moved to hostile countries (mainly Pakistan and China) after wars; managed by Custodian of Enemy Property for India (CEPI) under the Enemy Property Act, 1968.
- Legal Framework: Post-2017 amendments, CEPI can sell properties with Central government approval via e-auctions, tenders, or quotations. Ownership restrictions and compliance with the Act remain unchanged.
- Expected Impact: Stamp duty waiver reduces acquisition costs, encourages developers and institutional buyers, supports urban redevelopment, monetises idle assets, and eases government administrative burden.
To ehance the sluggish auctions of 'enemy properties', Maharashtra government has come up with a plan to waive off stamp duty and registration charges on the sale and purchase of enemy properties. The decision taken in a state cabinet meeting is expected to lower the cost of the transaction and hence attract more buyers into the property market, the officials have said.
What are Enemy properties?
Enemy properties are the assets left behind by people who moved to the countries which were hostile to India, mainly Pakistan and China, after the wars and geopolitics. These properties were handed over to the Custodian of Enemy Property for India (CEPI) under the Enemy Property Act, 1968, which was enacted after the 1965 Indo, Pak war. The law forbids enemy nationals and their heirs from selling, transferring or inheriting such assets.
Initially, the Act prohibited the disposal of these properties in any manner. However, a few changes were made in 2017 and CEPI was given the power, with the prior approval of the central government, to sell or dispose of these properties. Since then, sales have mostly taken place through e, auctions, calls for tenders, or receipts of quotations. Nonetheless, officials concede that the interest of the bidders has been quite low which has led the state government to take the latest policy step that has now been announced.
A senior official of the state revenue department revealed the waiver was essentially a relief measure to one of the major hindrances for buyers as HT. The move to waive off stamp duty] would bring down the property cost and thus, more participants would be attracted to property auctions, the official stated, further explaining that the step was taken in response to CEPI's appeal to the state government.
Officials have said that the combination of stamp duty and registration charges can become a considerable burden for buyers, especially in the case of expensive places in the city like Mumbai. In their view, by exempting this charge the government not only intends to make enemy property auctions more attractive and a normal source of revenue but also to enable developers and institutional buyers who have been reluctant so far to take part in the process.
Key facts about enemy properties in Maharashtra
- The state has 428 enemy properties, making it one of the largest holders of such assets in India.
- Mumbai alone accounts for 239 properties, underlining the concentration of these assets in high-value urban areas.
- Of these, 62 are located in the island city, while 177 are in the suburbs
- Outside Mumbai, the distribution includes 86 properties in Thane, 77 in Palghar, 11 in Ratnagiri, six in Nagpur, and four in Pune.
- Smaller numbers are located in Chhatrapati Sambhajinagar (2), Jalna (2) and Sindhudurg (1).
Officials revealed that majority of these properties have been subjected to protracted legal and administrative processes, causing them to deteriorate and lose their value gradually. Buyers' limited awareness and doubts about titles have additionally weakened the auction's appeal, even though the changes made in 2017 have made sales possible.
The stamp duty waiver is anticipated to be a great addition to the existing CEPI auction streamlining and outreach initiatives. By reducing the total cost of acquisition, the state government is convinced that more bidders will be attracted, thus, the likelihood of sales at higher prices and successful sales will be increased.
Simultaneously, officials emphasized that all transactions would still be carried out under the existing legal safeguards and that central government approvals would be obtained. The waiver is exclusively for stamp duty and registration charges and does not change the conditions of ownership or the requirement for compliance with the Enemy Property Act.
With a significant concentration of enemy properties in Mumbai and its neighboring districts, the move might also release long, idle real estate assets and thus help urban redevelopment.
Improved auction outcomes are expected not only to assist in monetising dormant properties but also to lessen the government's administrative burden of managing them, the government says. The next auction cycles will be under the microscope to see if the stamp duty waiver manages to turn policy intent into real bidder enthusiasm and finalized deals.
