Maharashtra slashes premiums on construction projects by half

In an effort to give further momentum to the real estate sector, the Maharashtra Cabinet on Wednesday decided to reduce all the premiums on construction projects by 50 per cent. The concession on premiums will be applicable till December 31, 2021.

Those projects, which will avail these concessions will have to pay full stamp duty on behalf of the customers, a press statement issued by Chief Minister’s office said.

Developers pay premiums to local authorities for constructing additional built up space in a unit area of land and helps bring down the cost.

The statement said that the Cabinet decisions of reduction in premium will directly benefit the customers.

The Covid pandemic and the lockdown has created financial stress on the State and the industrial sector. Therefore, to give a boost to the real estate sector in Maharashtra, the Deepak Parekh Committee was set up. The Committee gave its report to the State Government. Based on the recommendations the premiums have reduced. All planning authorities in the State will also be asked to reduce their premiums on construction projects. The Committee made recommendations to attract more investments in the real estate and affordable housing sector, the statement said.

In order to ensure that the concessions are not exploited by specific groups or projects, the concessions will be applicable either based on ready reckoner rates or market rates applicable from April 1, 2020. Between the two, the higher rate will get the concessions, the statement said.

The statement added that those project developers wanting to avail the facility will have to fully pay the stamp duty on behalf of their customers by December 31, 2021.