Homes in Mumbai to get cheaper thanks to the 50% cut in the construction premium, that was passed by the state government on Wednesday. Builders to even pay stamp duty.
By Varun Singh
On Wednesday a developer in South Mumbai celebrated because now he will save Rs 3 crore that he would have earlier paid in form of construction premium to Municipal corporation.
The state government on Wednesday announced a 50% cut in the premium charges to be paid by developers to the municipal body.
According to Ashok Mohanani, President, NAREDCO Maharashtra, Mumbai alone attracts around 22 premiums which is higher than other top metro cities.
All developers have claimed that this will lead into reduction in home prices. Developers say less premium payment the benefit will be passed on to home buyers.
This is what some top developers have to say on home prices getting reduced because of the cut in premiums.
“We welcomes the decision of the Maharashtra Government to reduce the construction premium by 50 percent. It will give a big respite to the developers, as the cost of premium as well as approval cost contribute 35 to 38% of the project cost, whereby the project cost will come down substantially,” said Mohanani.
Projects that wish to avail the benefit of concession will have to pay the full stamp duty on the sale of flats, whereby the consumers will get direct benefit of this concession, granted by the state government.
Kamal Khetan, Chairman and Managing Director, Sunteck Realty Ltd said, “The decision coupled with reduced stamp duty cost would help the sector to witness accelerated sales due to the feasible home prices in the upcoming time. It would incentivize the purchasing decision of the homebuyers and boost the residential real estate demand.”
Dr. Niranjan Hiranandani, President NAREDCO, said, “The reduction in premiums for new launches will help the development at the lesser input cost and over a period of time there is possibility of lower price for new inventories that shall come into the market.”
Deepak Goradia, President, CREDAI MCHI, said, “This move will lead to reduced cost for home buyers which will makes houses more affordable thereby increasing their purchasing power, further underlining the opportune time for them to buy a house.”
