After several groups of builders met chief secretary Ajoy Mehta on Thursday seeking reduction in premium rates on commercial properties charged by the BMC, the civic body will likely bring down premium rates for commercial buildings on a par with residential projects.
A senior officer of the BMC said, “At present, most builders are trying to construct residential properties. We have come across cases wherein commercial properties are demolished and then converted to residential projects. We want commercial properties to come up so that more jobs are created, especially in the IT sector. Hence the plan to slash the premium rate charged to builders for commercial properties.
As part of ease of doing business, we will also increase the number of installments through which builders could pay us the premium rates.” The officer also said that the rate of interest for delays in payment of premium will be brought down to the current rates of State Bank of India for loan default.
The BMC will soon write a letter of recommendation to the state government for these reductions. Earlier, the BMC had opposed measures that would slash its revenue since its chief source of income, the Octroi, has been abolished.
Also, its income from Property Tax this year has gone down since all tenements measuring less than 500 sq feet are exempt from paying the tax. The reduction in property tax was part of Shiv Sena’s poll promise. The civic body has also incurred expenditure for coastal road and the implementation of DP-2034.
Mehta had called a meeting to discuss the issues of the real estate industry which was attended by Maharashtra Chamber of Housing Industry (MCHI), National Real Estate Development Council (NAREDCO), and Practising Engineers, Architects and Town Planners Association (PEATA). Builders have repeatedly complained that the real estate industry was dying due to high premium charges. The industry had submitted a two-page list of demands to the government.
Mehta has also kept Principal Secretary of Urban Development Nitin Kareer and Municipal Commissioner Praveen Pardeshi in the loop. An office bearer of PEATA said the government intends to give relief to the building industry. “Whatever decision is taken will be known before July 31,” he said.