Say the relief for flats and tenements measuring up to 500 sq ft will make affordable housing more attractive for everyone.
The real estate industry on Saturday welcomed the state’s decision to waive property tax for homes measuring up to 500 sq ft, saying it will make affordable housing more appealing to both builders and buyers. department on Friday announced 100 per cent property tax waiver for small flats and tenements in the BMC’s jurisdiction. The relief will be effective from January 1, 2019. The move was inspired by a resolution of the BMC, which had in 2017 announced complete exemption for 500-sq ft homes and 60 per cent waiver for those measuring 501to 700 sq ft.
Rohit Poddar, managing director of Poddar Housing and Development Ltd, said the measure announced on Friday would drive demand in the affordable and compact housing markets. “You will see a noticeable spike in interest for houses under 500 sq ft. The decision will provide a huge relief to first-time home buyers from economically weaker sections of society,” he said.
Manju Yagnik, vice-chairman of Nahar Group and vice-president National Real Estate Development Council (NAREDCO West), said owners of nearly 17 lakh houses would benefit from the waiver. “An estimated 15 lakh houses measuring less than 500 sq ft will be completely exempted from the property tax system. Another 2 lakh houses will be eligible for a 60-per cent reduction in overall tax rate,” Yagnik said.
Amit Wadhwani, co-founder of Sai Estate Consultants Chembur Pvt Ltd, said nearly 64 per cent of housing units would be covered under the waiver scheme. “The decision may have some impact on infrastructure and overall development commitments, but it will drive a wave of confidence in the real estate market,” he said.
Ashok Mohanani, chairperson of EKTA World, said slum rehabilitation projects and 1BHK flats would be get direct benefit, though the BMC might face a revenue shortfall.
Prateek Bhattacharya, deputy regional CEO of Lodha Group, said the waiver and the recent GST rate reduction would make housing more affordable, driving demand. “For many, property tax is almost like a high EMI post possession,” he said. Last month, the GST Council lowered the tax rates for under-construction homes and low-cost units to 8 per cent and 1 per cent, respectively.
Arvind Nandan, executive director of research at Knight Frank India, said the Maharashtra government’s waiver would boost demand in the property market, which has been a big challenge for developers, and help existing owners decrease expenses. “The outflows for houses with smaller configuration will come down. In Mumbai, property prices are high, which leads to higher EMIs on bank loans. Friday’s decision will ease the burden of monthly outflow,” he said.
Parth Mehta of Paradigm Realty, Ramesh Sanghvi of Sanghvi Parrsssva Ggroup, and Farshid Cooper of Spenta Corporation echoed the sentiments.