Realty sector reacts to Maharashtra's decision to cut levies on real estate premium by 50%

A 50% discount has been approved on various premiums levied by the State government on construction till December 31, 2021.

Jan 07, 2021 09:01 IST India Infoline News Service

The move is being welcomed by the realty players. Here's what they have to say:

Kamal Khetan, Chairman and Managing Director, Sunteck Realty said, “The reduction in the construction premium on real estate projects by 50% till December 2021 is a significant decision taken by the state government to boost the real estate sector. 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."

Bhushan Nemlekar, Director, Sumit Woods said, "After the stamp duty cut, this decision of the Maharashtra Government to cut premiums by 50% is a masterstroke. This will give a much needed impetus to the real estate industry in the State. We will see a very positive response from the developers and the stakeholders. I feel that even the revenue of the State Government and the Corporation will increase because of this decision. This will also ensure a positive momentum going into the New Year after an effective last quarter for the industry on the back of lower interest rates, reduced stamp duty and festive offers by developers."

Ashok Mohanani, President, NAREDCO Maharashtra said, "After the stamp duty cut, Naredco Maharashtra welcomes yet another blockbuster 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. Mumbai alone attracts around 22 premiums which is higher than other top metro cities.

Higher premiums put additional financial burden on developers leading to higher costs for the homebuyers. 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. The decision will also bring the relatively higher construction premium at par with other states and the lending institutions will find the project funding more viable. It will result in more funding into the State's real estate sector."

Abhishek Jain, Chief Operating Officer, Satellite Developers Private Limited (SDPL) said, ''After being hit by the pandemic, the real estate sector has seen a solid recovery on the back of stamp duty reduction and a good festive season. Now this move of reduction in premiums by 50% will help rationalize input costs for the developers and will go a long way in expediting project completion thereby keeping price escalation in control. The industry will also witness new launches in the market attracting investments from institutions. All in all a good move that will sustain the growth of the real estate industry in the coming months.''  

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