Reduce taxes, expedite clearances to fuel demand, says realtors

The forthcoming state budget should reduce taxes, remove duplication of taxes and expedite project clearance to boost the realty sector, say realtors. These are important to meet the demand for affordable housing schemes and generate jobs in large numbers, they add.

Realtors have to pay 6% stamp duty while acquiring land. After the construction of the houses, the buyer has to again pay 6% stamp duty on the house and 12% GST (the builder may compensate as per the tax set off). This results in about 10% of duties and taxes to be paid by the buyer, which realtors say is too much for buyers, especially in the affordable housing segment.

"A reduction in the tax burden on the buyer will fuel demand for affordable houses. This will result in higher revenue collection for the government. It is evident from previous cases that whenever stamp duty has been reduced, revenue collection has shot up," said Jaxay Shah, president of Confederation of Real Estate Developers Associations of India (CREDAI). He also sought a reduction of a premium on additional Floor Space Index (FSI) in affordable housing segments. "Higher premium is a deterrent for the realtors to go for additional houses. It does not benefit the realtor and buyers," he said.

Another major bottleneck is delayed in various approvals from the government authorities, which increases the gestation period of projects resulting in cost and time overruns making projects unviable for the realtors and buying costlier for the customers. "There should be a single window and time-bound clearance. Officials need to give nod within a specific time frame, or else it should be considered as a deemed clearance," said Vijay Shah, MD of Ahmedabad-based Vijay Builders Pvt Ltd. "Officials should be penalized if clearance is not given in a time-bound manner.

EXPERT SPEAK

• There are procedural bottlenecks because realtors are not coming up with projects in Gujarat. Other states are leapfrogging and bring projects from attractive destinations, says Vijay Shah, MD of Ahmedabad-based Vijay Builders Pvt Ltd.