Buying a house and carrying out interior work in your flat will be a costly affair because the BJP-led government has increased premium on floor space index (FSI), and taxes on steel and plywood.
Buying a house and carrying out interior work in your flat will be a costly affair because the BJP-led government has increased premium on floor space index (FSI), and taxes on steel and plywood.
State finance minister Sudhir Mungantiwar increased premium on the use of the additional FSI. Besides, 5% tax will be levied on buying steel from other states and an additional 5% tax will be levied on plywood purchase.
The state government has decided to grant additional FSI for industrial and educational purposes, based on the width of the road by charging premium. "Developers can buy additional FSI from 0.60 to 0.33. The premium will be 60% of the current ready reckoner (RR) rate. Earlier, the government had to freeze the premium rate to 2008's RR rate. The money was going into the developers' pocket and the buyers were not directly benefiting. Now, the government will be able to earn Rs 3,500-4,000 crore additional revenue," chief minister Devendra Fadnavis said.
Sunil Mantri, president of NAREDCO, the developers' umbrella body, said they had expected 'acche din' but now felt there were bad days ahead. He said that they were expecting a lot of help for the real estate industry. "If the government will treat us in this way and only impose taxes, the prime minister's dream of a house for every one will not come true. The real estate industry is already going through a tough time and now we will have to pass on additional taxes to the buyers. Buyers are always at the receiving end. Besides, 80% of the steel has been brought in from other states as there are very few steel firms in our state. The 5% tax on steel will further burden the construction industry," Mantri said.
He also said that a rise in the premium rate on additional FSI has resulted in an increase in rate of transfer of development (TDR). "Two months ago, the TDR was sold at Rs 3,000-4,000 per sq ft, now it is sold at Rs 5,000-7,000 sq ft. We hope the CM will take some corrective measures so that the common man can afford to buy his dream house," Mantri added.
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