Maha Reduced Realty Premiums to Generate Economic Activity worth Rs 10 Lakh Cr

<span style="font-weight: 400;">Maharashtra government’s decision to reduce real estate premium by half is expected to generate economic activity worth Rs 10 lakh crore in MMR, real estate industry body Credai MCHI has said.</span> <span style="font-weight: 400;">CREDAI MCHI also estimates that t

BY Realty Plus
Published - Jan 30, 2021 4:06 AM

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Maharashtra government’s decision to reduce real estate premium by half is expected to generate economic activity worth Rs 10 lakh crore in MMR, real estate industry body Credai MCHI has said. CREDAI MCHI also estimates that the premium reduction will help residential real estate new launches make a comeback in Q1 of 2021, to almost 100% of pre-Covid level (Q1, 2020). Premiums and approvals attribute to approximately 30% of project cost, according to CREDAI MCHI research. The move is also expected to make housing more affordable for homebuyers in the region. MMR witnessed over Rs 5 lakh crore worth of real estate being sold and registered in the quarter ending 2020, according to CREDAI MCHI research. The last quarter also witnessed a growth of more than 50% in terms of number of units sold as compared to the corresponding quarter of 2019, signifying the increase in demand for residential properties in MMR. After reducing stamp duties in the state to boost residential sales, the Maharashtra government on January 6 approved the proposal to cut the premium on real estate projects by half till December 31, 2021. Developers availing of the scheme would have to pay full stamp duty and registration charges on behalf of homebuyers. Premium typically refers to the multiple charges that are levied by the state with respect to approvals for initiating, progressing, and completing the area or additional area in a project. On the recommendations of the Deepak Parekh committee, the Maharashtra government had been weighing a reduction in the premiums on real estate projects under the Development Control and Promotion Regulations (DCPR). The committee had also proposed that the reduced premiums be paid at the time of granting the occupancy certificate, without any interest being levied. According to the committee, as of date, there are as many as 22 premiums collected in Mumbai under various heads – including FSI, staircases, lift well, lobbies, etc. This is significantly higher than in other comparable top cities of the country.