As part of measures to support the troubled real estate sector,The state government has cut the fee for sanctioning building plans of residential properties in Bengaluru . The fee has been reduced from 0.5 per cent per square metre of the guidance value to 0.2 per cent.
The government has also slashed the fee for industrial structures from 1 per cent to 0.3 per cent, apart from decreasing the surcharge amount. The Karnataka Town Planning Authority (Second Amendment) Rules, 2021, were notified in the gazette recently, bringing into effect the revised charges.
But sections of developers, homebuyers and industry experts are not very enthused by the move. RERA activist MS Shankar said that the fee for sanctioning residential building plans was 0.3 per cent per square metre in 2015 and the government increased it to 0.5 per cent in September last year, besides hiking the rates for other types of structures. “After a public outcry, it (residential rate) has now been reduced to 0.2 per cent, which is expected to provide only slight relief,” he added.
Suresh Hari, the chairman of CREDAI Bengaluru, said that the industry had been voicing concerns over various charges and it was well known that 25 to 30 per cent of the cost borne by buyers was because of multiple permissions and fees. “The real estate industry suffers a multitude of taxes and charges. Any reduction is a welcome move as it will eventually benefit homebuyers,” he added.
CN Govindaraju, the chairman and managing director of Vaishnavi Group, said that reducing the building plan sanction rate was an encouraging step by the government. But it will have a negligible impact on the development cost since prices of raw materials such as cement and steel have increased, he added.
Shabeer Sait, the executive head of operations at Irshads Property Matters, said that the decision would benefit only projects in the planning stage. He suggests that the government should take its cue from Maharashtra and reduce stamp duty charges for a short duration to boost the demand for housing. “This will also result in savings for homebuyers,” he added.
Errol Fernandes, the chairman and managing director of Ferns Estates, said that the fee cut would help lower the project cost of new launches. “We hope to pass on these savings to our customers, which will help in improving the pace of our sales,” Fernandes said.
