Property rates likely to come down in Haryana
All those who purchased apartments, plots or built-up houses in Gurgaon and other Haryana towns in 2006 and later, may get some refunds from their respective developers as the Haryana government might reduce the rate of EDC it charged from developers during this time.india Updated: Mar 21, 2010 22:36 IST
All those who purchased apartments, plots or built-up houses in Gurgaon and other Haryana towns in 2006 and later, may get some refunds from their respective developers as the Haryana government might reduce the rate of external development charges (EDC) it charged from developers during this time.
The decision could also benefit potential property buyers who could witness lighter price tags on property options.
The EDC is charged from developers by the Town and Country Planning Department and given to the Haryana Urban Development Authority (HUDA) for providing master civic infrastructure such as roads, sewerage and storm water drainage lines and others amenities in the city.
The developers, in turn, charge the same EDC from property buyers and include it in the price of the property.
T.C. Gupta, director, Town and Country Planning (TCP) Department told HT that a committee of developers, including DLF, Unitech, Ansal API, Raheja and others had been formed under the directions of Haryana chief minister Bhupinder Singh Hooda to work out the EDC.
Rajiv Singh, vice-chairman, DLF Group has been made the head of the committees.
“The committee was formed after major developers approached CM Hooda, complaining that the EDC was exorbitantly high since 2006 and it was reflecting on the cost of properties they were offering in the market. They had contended that it was ultimately the end users who were paying the inflated property rates through their noses,” Gupta said during a meet called by the Gurgaon Chamber of Commerce and Industries (GCCI).
“In 2008, the EDC for an acre of group housing plot was Rs. 1.04 crore. This was increased to Rs. 2.67 crore in 2009. The HUDA (that draws 49 percent of the total EDC collected), should reduce it to 10-15 percent, as it’s a no-profit, no-loss organisation and isn’t meant to earn profits,” said a developer on condition of anonymity.
GCCI founder president PK Jain demanded that EDC should be calculated on the basis of realistic assessment of work involved.
“But, in Haryana, EDC levied by HUDA is abnormally high and this gets further inflated by adding 49 per cent for overheads and 10 per cent for escalation (compounded yearly),” said Jain.
Gupta replied by saying that developers had strongly objected to HUDA charging 49 percent of the total EDC as administrative charges and demanded HUDA share to be reduced to 10-15 percent only.
“If their demand is met and EDC is reduced with effect from 2006, the actual reimbursement to developers could take place for this period,” Gupta said.
“The developers will have to refund the benefit in terms of reduced EDC to customers who had bought properties from them during this period,” he added.