The Hindu Business Line : Maharashtra builders seek stimulus plan

Mumbai, Feb. 10 With shrinking sales and rising inventory, the 600-member Maharashtra Chamber of Housing Industry has sought abolition of value-added tax and reduction in stamp duty and property tax, besides other facilities to spur demand.

The clamour of the builder fraternity for banks to lower home rates has come about. Prices have corrected across the State by 15-20 per cent and more builders are getting into the affordable home segment. However, all indications are that buyers still consider the current prices high and unaffordable and look for a further drop in prices in the months to come.

High Transaction cost

The chamber President-elect, Mr Sunil Mantri, said home buyers were not coming forward due to high transaction cost such as VAT, service tax and stamp duty, despite the reduction in prices.

Seeking a stimulus package from the State Government, Mr Mantri said one bed-hall-kitchen apartments up to 60 sqm should have 100 per cent rebate on property tax, two BHK up to 80 sqm - 50 per cent and three BHK of up to 100 sqm - 25 per cent, for a three-year period.

Stamp duty for homes below 1250 sqft should be reduced 50 per cent for this year and for development agreement slashed to one per cent from 5 per cent.

The prescribing norm for townships should be reduced to 25 acres from 100 acres and sanction powers should be vested with the local authorities.

The ready reckoner for 2009 should be revised to that of 2007, since prices have fallen, he said.

No new projects

Mr Mantri said housing projects have come to a halt and no new projects are being taken up. About 1.5 million construction labour stand to lose employment and the realty sector was the single largest employment generator for agriculture labour.

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