Maharashtra cabinet approved 50% reduction in premium for real estate projects upto December 31, 2021, real estate industry experts are urging other states to follow suit.
Industry leaders observed that such move will not just trigger cost reduction but also enable the developers complete their projects on time with a major enhancement in developers operational capacity.
“The reduction in premiums will serve as role model for other state governments to revive the real estate sector and bring back much needed employment and overall reduce the pain of the pandemic,” said Sanjay Dutt, joint chairman, FICCI Real Estate Committee.
“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,” added Dutt.
Raj Menda, joint chairman, FICCI Real Estate Committee said, “We hope that other states take similar initiatives.”
Developers within Maharashtra are already optimistic about the impact on reduction cpupled with stamp duty reduction it had previously announced. The state had earlier reduced the stamp duty rates from 5 per cent to 2 per cent till 31 December 2020 and 3 per cent till March 2021.
“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,” said Kamal Khetan, chairman and MD, Sunteck Realty.
Vikas Chaturvedi, CEO, Xanadu Realty said, It will strengthen the supply side, reduce project timelines, and rationalise input costs for developers in the state. Moreover, since the direct benefits are being passed onto the end-consumer, it will stimulate the regional market in Maharashtra by bolstering consumer purchase sentiment and investor interest.”
“This will not just increase sales of homes owing to reduced prices, but this will also help churn the wheels of the overall state economy given the far reaching impact of the construction sector,” Bhavin Thakker, MD (Mumbai), Savills India.