Developers welcome state’s decision to waive property tax
The real estate industry welcomed the state’s decision to waive property tax for homes measuring up to 500 sq ft, saying it will make affordable housing more appealing to both builders and buyers. The urban development department announced 100% property tax waiver for small flats and tenements in BMC’S jurisdiction. The relief will be effective from January 1, 2019. The move was inspired by a resolution of BMC, which had in 2017 announced complete exemption for 500 sq ft homes and 60% waiver for those measuring 501 to 700 sq ft.
Ms. Manju Yagnik, Vice Chairperson, Nahar Group & Vice President NAREDCO (Maharashtra) said, “This move is for the larger interest of the citizens specially in the middle class category as close to about 15 lakh houses belong in the 500 sq. ft range, which will be completely relieved of property tax. On the other hand, close to 2 lakh houses will be eligible for 60 per cent reduction in overall tax rate which come under the 500 to 700 sq.ft category. It is a consumer centric move which will also give a boost to affordable housing.”
Mr Arvind Nanadan , Executive Director of Research at Knight Frank India stated, ” The decision is a good move which can boost property buying decisions. The outflows for houses with smaller configuration such as 1 bhk, 1.5 bhk or in some cases even 2 bhk will come down. This will also help existing owners keep their expenses towards the housing in check. The biggest challenge for the developers in the last few years has been to bring the real demand back to the market. This decision would also support Government’s initiative to provide ‘Housing for All by 2022.”
Mr.Amit Wadhwani, Co-founder, Sai Estate Consultants Chembur Pvt Ltd reflects, “With 64% of units falling under the category, the waiver of property tax for houses under 500 sqft is a positive move by the city authorities to reduce burden of house ownership. Government’s decision to solve the persistent challenge of housing will further promote affordable housing with increased accessibility. After the change of property tax from rateable value to capital value system in 2010, this is a progressive move with nominal effect on BMC but might have implication on infrastructure and overall development commitments. However this will drive a wave of confidence in the market and is likely to be highly fruitful for the 17 lakh tenants and owners of the mid segment and affordable property”