Maharashtra Cuts Real Estate Premiums By 50%
To boost real estate sector hit by the coronavirus pandemic, Maharashtra government decided to reduce all premiums related to the sector by 50%. It will be applicable till 31 December, 2021. All projects which want to avail of the premium concession will have to pay full stamp duty for the customers till 31 December. High premium puts a financial burden on developers leading to higher costs for the homebuyers.
The reduction in premium will benefit all stakeholders — developers in terms of the reduced construction cost for projects. For customers, it will help reduce prices and boost demand. For the government, it will help increase premium and levy collection as the move is likely to revive stuck projects.
The reduction in premiums would help the Mumbai market as the city collected as many as 22 premiums under various heads, which is higher than other top cities. In the current economic scenario, the step would ease the burden and soften the prices resulting in more sales in the coming months.
The number of premium and amount is the highest for financial capital – Mumbai, it amounts to almost 25-35% of project cost for the developers. The state government was the first to provide relief to the industry. This step will be a direct incentive for homebuyers waiting for the right time to invest in real estate. The move is a win-win for developers and end-users. It will lead to a reduction in the project cost for developers.
The Maharashtra government earlier slashed the stamp duty charges. Usually payable on the sale agreement, the stamp duty rate is fixed by the state governments. The stamp duty from 1 January, 2021, until 31 March, 2021, will be 3%. Residential sales in Mumbai, India’s most valuable property market, saw a sharp surge in December.