If you like to follow real estate news then you might have heard the big decision made by the Maharashtra government. They introduced a fiscal package of about Rs 2,200 crore in Mumbai’s real estate industry. It will surely have a great impact on the Real estate industry and change a lot of things for the buyers. Every little decision made by the government has some kind of impact on the users one way or another. Here will learn the impact of this plan and how it will affect you if you want to make an investment in the real estate.
The Chief Minister of BJP, Devendra Fadnavis passed this package for the real estate industry. Due to buying a costly property, it can affect the construction work which might cause problems for the investors. That is why the government wants to ensure that the interests of both parties remain common. You can learn what benefits this package provide for you by reading the following paragraphs.
What is the decision by the state government?
In this package, there are significant cuts in the payment made by the builder for getting an additional buildable area for any kind of project. This will surely help in completing the construction work faster and ensure that the builder can really invest in properties without any troubles with their work. It will only help in making the real estate industry grow at a rapid rate to ensure that everything is perfect. Many companies from the Real estate industry approached the government for such issues. The companies like the Maharashtra Chamber of Housing Industry, National Real Estate Development Council, Practising Engineers Architects, and Town Planners Association approached the government.
After looking into the request of the people from the real estate industry, the government planned this package. In this Government package for real estate, it will lower the premiums for the construction providing relief to the people. The state government has now regulated this package to reduce the premiums with the real estate sector.
Affect of this decision made by the government
The Government package for real estate will be really helpful for the people in the real estate industry as it will help them in various ways. Well, according to the initial estimation the dole will cost about Rs 1,260 crore. It will also cost Rs 800 crore. After the regulation of this package the building in redevelopment in MHADA colonies, the government will also lose about Rs 140 crore of revenue. While the overall estimate is about Rs 2,200 crore for the project.
There was a meeting between the representatives from the Real estate industry regarding the delays in the projects. This might cause a lot of job loss due to the delay in the job. That is why the develops are given a lease so that they can complete their project in the given time. Due to low investment and liquidity freeze in the industry, it leads to delay in various types of projects. That is the reason why many developers are offered stimulus to complete the projects.
Result of the Package for real estate by government
After taking the consideration of various real estate investor the Government package for real estate was introduced. This helped in lowering the premium from various segments. When the new regulation for the development was introduced last September, the government also introduced many other projects to ensure the development of infrastructure. After the backlash from the municipality, the government withdraws the additional cess.
The department run by the Chief Minister has lowered the payable premiums for the FSI. Around 40-50% payment on the premium has been granted by the government on all the project in Mumbai. FSI is known as the ration of the plot are to the built-up area in a project. The FSI in the residential and commercial area has been reducing to 35-40%. To promote public parking lots the payable on them has also be slashed.
The validity of the package
The government ensured that this concession for the projects will last over 2 years of the time period. For this package, a lot of modification needed to bed made but the CM used his discretionary powers to direct the authorities for the implementation of the concession immediately. According to the sources, at the beginning of 2019-20 government will have a projected income of around Rs 3,454 crore which is the 3rd highest. While the revenues were declining in the past several years but it will surely help the government to recover those losses.