Maharashtra state government recently approved a proposal to reduce real estate levies by 50% until December 2021 as recommended by the Deepak Parekh Committee. This is expected to reduce premium prices paid by realty developers on each project along with the overall price of houses.
Currently, the construction of each project in Mumbai requires the respective builder to pay 22 different premiums, which acts as a significant factor in setting unit prices. On the contrary, their Bengaluru and Delhi counterparts are subjected to 10 and five premiums respectively.
In addition, the Maharashtra government has reduced the stamp duty from January 1 to March 31, 2021, to 3% instead of the original 5% mark. Experts believe that the combined effect of the government’s decision is rejoiced by the developers and encourages them to undertake new projects in desirable areas.
Previously, the Maharashtra government had reduced the stamp duty to 2% for the last three months of 2020. The move was received positively by the market, broke the December sales records in real estate for Greater Mumbai, and strengthened the winds of statewide real estate revival.
According to the new proposal, developers will pay the stamp duty and registration charges on premium real estate projects instead of homebuyers. In return, developers will receive heavy concessions from the state government. This creates a price vacuum that is expected to boost the confidence of potential buyers as well as construction giants.
The overall impact of levies reduction is expected to reflect in the low cost of new units, which could ride the confidence tide of the new year and bolster real estate demands. Furthermore, the premium reduction due to 50% levies will kickstart the realty projects that were put on hold due to the lack of funds and regular cash flow after COVID-19 lockdown.