The real estate industry has welcomed the Government of Maharashtra move to reduce premiums charged by the civic authorities by 50% basis ready reckoner rates of 2019 or 2020, whichever is more, for the next one year until 31 December 2021, as recommended by the Deepak Parekh committee, a latest update from Federation of Indian Chambers of Commerce & Industry or FICCI noted. This is expected to give a fillip to the real estate activities in the state. While on one hand it will reduce the stamp duty burden for the buyers, it will, on the other support the developers in building new projects at a reduced input cost thus effectively lowering the price for new projects in the long run.
Sanjay Dutt, Joint Chairman, FICCI Real Estate Committee said that the Maharashtra government has been proactively listening to the challenges faced by the real estate sector, which is of the biggest employers and contributor to the economy. Despite stamp duty reduction showing an increase in revenue for the state, the state government realized that given the current low residential demand and reduction in prices many projects were not viable.
This move will ensure that projects stuck for last mile funding, or that have no takers of unviable projects, are considered. Despite a hair cut in value by the developers and lately NBFC, it was not appealing to the PE. The reduction in premiums will serve as role model for other state governments to revive the real estate sector.
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