The state budget has managed to disappoint the real estate industry and prospective home buyers in equal measure. Both contend that only the government will benefit from the 5% stamp duty it has imposed on transactions of immovable properties.
Over the past one year, a hike in property prices coupled with a rise in interest rates on home loans, has forced home buyers to defer their plans. Mitesh Gala, one of the many Mumbaiites hunting for a house, feels cheated with the budget. “Instead of lowering the stamp duty, the state has snatched whatever small benefit we had,” he rues. Charles D’Souza, an executive with a multinational company, is disappointed the state did not focus on affordable houses. “We can’t afford prices quoted by private builders and expected some relief from the state,” he said.
Builders are unhappy that state budget has no tax concession for raw materials like sand, cement and steel. “There is nothing for the real estate industry despite the fact that we are going through such a rough phase,” said Paras Gundecha, president, Maharashtra Chambers of Housing Industry (MCHI). “The state just talks of affordable houses. But when it comes to action, nothing is done,” he added.
Gundecha says that delays in approvals tend to increase cost, which is ultimately borne by consumers. Sunil Mantri, chairman, Indian Merchants Chamber (Real Estate Committee) said a decrease in stamp duty along with removal of value added tax would have brought respite to the industry.