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Mumbai: With elections to 10 major Municipal Corporations including Mumbai and Thane just a year away, the Shiv Sena, Nationalist Congress Party (NCP) and Congress led Maha Vikas Aghadi (MVA) has wooed builders and home buyers with concession in Premium, but placed the onus of paying full Stamp Duty on flat purchases on the builders.
In a major cabinet decision taken on Wednesday, the MVA government approved the proposal to give 50 per cent rebate on all premiums till December 31, 2021 and those projects which will avail this concession will have to pay full stamp duty on behalf of the customers. As a result of this decision, the consumers will also get the direct benefit of the concession given to the construction projects. A decision to this effect was taken at the state cabinet meeting chaired by Chief Minister Uddhav Thackeray.
The state’s economic and industrial sector has been in a slump due to the threat posed by the Covid-19 virus following the World Health Organization (WHO) declaring it as an epidemic and the state government’s timely lockouts to protect the health of the people.
The state government had set up the Deepak Parekh committee to make recommendations to give boost to the construction sector in the state. The committee submitted its report to the government with suggestions to make investment in the construction sector more attractive and to increase the availability of affordable housing to the average home buyer.
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As recommended by the committee, the state government has decided to give 50% discount on all the various premiums levied by the government on construction projects till December 31,.2021 and also to give concessions in the premiums levied by all planning authorities / local administrations at their level. In order to ensure that the benefit of this concession does not accrue to a particular group or project, the concession will be considered for surcharge on April 1, 2020 or the current annual market price table whichever is higher.
It was decided to give a rebate in the stamp duty of the state government to promote the housing sector. The term of this concession is valid till March 31, 2021. All the projects which want to avail the premium concession will have to pay the full stamp duty by the customer till December 31, 2021. Therefore, consumers will also get the direct benefit of the concession that the state government wants to give in surcharge. As a result, the vibrancy in the housing and real estate sectors will continue for the next one year. It will also be of great benefit to the general public who want to own a house or a flat.
Senior Bharatiya Janata Party (BJP) leader Advocate Ashish Shelar has questioned the MVA government wanting to know by how much the cost of flats will be reduced for the home buyers? He further wanted to know as to how will the loss in revenue for the Brihanmumbai Municipal Corporation (BMC) recovered?
In a series of Tweets, the former Mumbai BJP chief warned the MVA government against putting out misleading precondition that the premium concession is for the builder and the builder shall pay stamp duty for the home buyers. In a sarcastic vein Shelar taunted the Congress for enduring the kicks for the sake of power
Reacting to the cabinet decision taken today, Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory remarked, “It’s the much asked for and required icing on the cake for the real estate sector, especially in the state of Maharashtra. After the steep, temporary reduction in stamp duty charges, the 50% reduction in premium payments until December 2021 will benefit the supply side immensely”.
He further added, “It will also help developers pass on further benefits to homebuyers, invigorating demand for real estate projects that are under construction. This move is likely to propel developers to offer extended payment holidays and also give lucrative price proposals to buyers in projects where the inventory has been selling slowly. While the pandemic and subsequent lockdowns made developers focus on completing existing projects and largely postpone launching new ones, this move of halving the different kinds of premiums and levies is going to make developers contemplate going back to launching new projects.”
