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Arun Developers, Pune

Arun Park, Opp. Aditya Birla Hospital,
Chinchwad, Pune - 411033

Affordable housing in Maharashtra could take a hit with 1% surcharge

The hike, aimed at funding the Metro in case of Pune and Pimpri Chinchwad, would be seen as a "significant outflow" by many homebuyers, prompting them to adopt a wait-and-watch strategy, realty experts said.

PUNE: The state government's decision to levy 1% surcharge on stamp duty on home sales to fund transport projects has failed to cut ice with realty players, who have termed the move "unwarranted", while expressing fears of demand slide, especially in the affordable housing segment.

The hike, aimed at funding the Metro in case of Pune and Pimpri Chinchwad, would be seen as a "significant outflow" by many homebuyers, prompting them to adopt a wait-and-watch strategy, realty experts said.

"This increase is unwarranted," Anuj Puri, chairman of Anarock Property Consultants," said, while expressing concerns over the fact that the move might dealt a blow to the slight rise in realty sales achieved in 2018 after a long sluggish period.

Puri said homebuyers were somewhat not concerned about transport projects as taxes were "increased on such pretexts in the past as well, without much work being visible on the ground". 

A 1% hike in stamp duty for a house costing Rs 40 lakh would translate into Rs 40,000 — an additional expense which any buyer in the category could have utilized for other purposes, the experts said. "This will definitely take a toll on the buyers' sentiments, especially those in the affordable and mid-segment category, who are primarily dependent on home loans while making a buying decision," they added.

A property dealer in the city said the hike would leave developers betting on the new year to clear their unsold inventory with a "heartburn".

Puri further said it was a paradox that on one side the government was offering multiple sops to boost affordable housing in line with its mission of Housing for All by 2022, and on the other, it is adding to the burden of the very price-sensitive buyers of such homes.

Credai Pune metro member Rohit Gera also questioned the government's policies. "How can the government reduce the GST on housing and then negate it by increasing the stamp duty. The real estate sector isn't a cash cow any more and the sooner we realise this the better,'' he said.

The state Credai president Shantilal Kataria said people investing in affordable houses want concession and opt for smaller area to stay within the budget. "The additional burden in the form of the 1% hike will affect the purchasing power among consumers, which will indirectly affect the developers,' 'he said. 

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