Maharashtra plan to cut building premiums may be tweaked – Times of India

MUMBAI: Following allegations by the BJP that the scheme to cut real estate premiums by 50% will benefit only a select set of big builders and finding even the Congress opposed to it, the state government may tweak the plan.
According to a senior official, the government may ask builders to pay premiums based on the 2019 Ready Reckoner (RR) rates instead of the 2020 rates if they opt for the discount, when RR rates of several land parcels in the city were reduced by almost 70%. All real estate premiums and charges are calculated on the basis of RR rates.
This means that if the RR rates are less, builders end up paying less for premiums and charges.
On Sunday, opposition leader Devendra Fadnavis had accused the Maha Vikas Aghadi government of offering huge sops to a preferred set of developers under the garb of boosting demand in the economy.
Fadnavis had said the Deepak Parekh committee recommendations, which were discussed at the last state cabinet meeting, would result in a “windfall” of as much as Rs 2,000 crore in the specific projects of five developers.
Fadnavis had alleged a substantial decrease in RR rates such that it benefited certain plot holders to the extent of a 70% reduction in payment. These plots are owned by developers in the western suburbs by the seafront, in the eastern suburbs and in the island city, he claimed. In addition to the reduction in RR rates, Fadnavis said the government was further proposing to decrease premiums, levies and cess imposed by the municipal corporations.
“Given the controversy over the scheme, it may be proposed that builders who opt for the 50% reduction scheme will pay premiums as per the 2019 RR rate. So they will not have a double benefit of a reduced RR rate and a 50% discount in premiums. Apart from this, they will anyway have to pay the entire stamp duty for sale of flats if they opt for a 50% discount in premiums,” an official said.
The draft government resolution states that developers who opt for the 50% reduction in premiums will have to pay the entire stamp duty when they sell flats to buyers. Builders will have to give an undertaking to the local bodies that they will pay the entire stamp duty and not charge any stamp duty from home buyers.