The real estate sector, which has been reeling under a crisis as fewer and fewer people have been buying homes for the past several months, wants the government to come out with a comprehensive housing policy in the state budget.
This must include reduction in stamp duty and developmental charges, sops to builders constructing affordable housing, clarity in various building regulations, lower taxes for raw materials used in construction and speedy permissions to boost construction activity.
“We need a time-bound programme with regards to redevelopment of dilapidated buildings. It will lead to additional homes as well as money for the state,” said Anand Gupta, secretary, Builders Association of India. “The time has come to take a long-term view as this industry is capable of generating a substantial amount for state coffers.”
Sunil Mantri, chairman of the real estate committee of Indian Merchants Chambers, demands that small flats up to 650 sq ft be exempted from Value Added Tax. “After the recent 2% service tax hike by the Centre, all taxes together add up to 10% of the flat’s cost.”
Any hike in taxes will be borne by flat buyers, said activists. Advocate Vinod Sampat, who heads the cooperative societies welfare association, said the state should not be hiking the stamp duty fees for leave and licence agreements. “People are forced to rent as flat prices have become exorbitant,” said Sampat.
In its 2011-12 budget, the state estimated a revenue of Rs 15,677 crore from stamp duty and registration charges this financial year, which has not materialised because of the slowdown in sales.
Builders blame the slowdown on red-tapism, stringent home loan conditions and increasing cost of raw materials.
“The state has to understand that any burden will be borne by flat buyers. Builders are just coordinators,” said Sukhraj Nahar, director, Nahar group. “The last year has seen a massive increase in prices of cement and steel, which are vital items for construction, so we can’t cut prices.”