Today, the Maharashtra government slashed premiums and levies on construction by 50% until December 31, 2021, boosting the state’s real estate sector.
The real estate sector has been poorly impacted by the economic consequences of the COVID-19 pandemic. Thus, as a ray of hope to boost the industry, the government has approved a contraction in premiums by 50 percent under the new Development Control and Promotion Regulations (DCPR) rule 2034 across the board for currently working new projects up to December 31, 2021.
Industry specialists and experts have commended the government’s efforts to give a push to the sector and are predicting a rise in new projects and sales in the upcoming months.
The Guardians Real Estate Advisory Chairperson Kaushal Agarwal said “the move was required and is like icing on the cake for the real estate sector, especially in Maharashtra. After 50 percent, a temporary reduction in stamp duty charges, the 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, stimulating 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 sales have been slow.”
High premiums impose a financial burden on developers heading to higher costs for the homebuyers. In the prevailing economic scenario, the step to slash premiums by 50 percent would lessen the load and soften the prices resulting in more sales in the upcoming months.
Robot Gera, Gera Developments Managing Director (MD) shared, “We welcome the move by the government to reduce the premiums. It will provide relief to developers, the cost burdens, thereby increasing supply at lower prices.”
He then says, “It is, however, important to realize that the charges paid for approvals include development charges and other charges under other heads. Effectively, this means the total benefits will be much less than 50%.”
The Maharashtra government had already lowered stamp duty from the existing 5 percent to 2 percent in September 2020 till December 31, 2020, and fixed it at 3 percent from January 1 till March 31, 2021.