Bollywood real estate deals: Are the returns on investment as glamorous as the stars?

While Bollywood stars continue to invest in and offload properties in Mumbai’s luxury real estate market, underscoring the market’s resilience, the real story lies in the fine print—timelines, taxes, and transaction costs. Although the eye-catching returns may seem impressive, the annualized returns could tell a different story.

Mumbai real estate attracts stamp duty, registration charges, brokerage fees, and capital gains tax, which can reduce overall returns by 7–10%. Therefore, an expert has said in a Linkedin post, that it is crucial to focus on annualized returns and account for transaction costs to accurately assess investment performance, particularly in real estate.

Also Read: Mumbai real estate: Gauri Khan sells flat in Dadar West for ₹11.61 crore amid Mannat renovation

A LinkedIn post by Gundeep Singh, founder of Simplease, pointed out the recent wave of celebrity property sales, including those of Gauri Khan, Akshay Kumar, and Sonakshi Sinha, demonstrating how Bollywood is tapping into Mumbai’s booming luxury real estate market.

It cited examples of Gauri Khan recently selling a premium apartment at Kohinoor Altissimo in Dadar for ₹11.61 crore, claiming a 37% profit in just 19 months. Meanwhile, actor Akshay Kumar sold two flats in Oberoi Sky City, Borivali, for ₹6.60 crore—marking a 90% return over an 8-year holding period. Sonakshi Sinha also sold her flat in Bandra’s 81 Aureate for ₹22.50 crore, earning a 61% gain since buying it in 2020.

Also Read: Akshay Kumar sells two apartments in Mumbai for ₹6.60 crore, nets 90% return on investment

‘Real story lies in annualized returns’

Singh said that at first glance, these numbers suggest a booming real estate market for celebrity investors. “They sound like amazing returns, but the real story lies in the annualized return, not just the headline number,” he wrote.

In his LinkedIn post, he pointed out that Gauri Khan’s 37% profit over 1.6 years translates to an annualized return of roughly 21.1%. Sonakshi Sinha’s 61% gain over nearly five years is about 10.1% annually. Akshay Kumar’s 90% gain over eight years is around 8.4% annually.

Additionally, stamp duty and registration charges in Mumbai typically account for 5–6% of the property value, and brokerage fees can add another 1–2% on both the buying and selling ends.

“That’s 7–10% shaved off your returns from the overall returns. It is imperative to look at annualized returns and factor in transaction costs to truly evaluate investment performance—especially in real estate,” he wrote.

Additionally, Gauri Khan’s property, being sold within 24 months of purchase, attracts short-term capital gains tax—meaning it will be taxed as per her income slab. In contrast, the other two properties qualify for long-term capital gains tax, which is charged at 12.5% without indexation or 20% with indexation, Singh added.