4 stocks likely to benefit the most from 50% cut in premium for realty projects by Maharashtra govt

January 7, 20215:40 pm
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Maharashtra cabinet on January 6 cleared the proposal to reduce all premiums for on-going as well as new real estate projects by 50 percent, up to December 2021. The decision was taken after the recommendations of the Deepak Parekh committee.

The developers welcomed another strong decision of Maharashtra Government to boost real estate sector which generates maximum employment and had not seen pick up in sales for several years.

“While the fine print is awaited, we believe this is a significant positive for developers considering construction premiums amount to around 25-35 percent of project cost for developers. Consumers are likely to benefit from effective nil stamp duty rates under this scheme. As a result housing demand will increase,” Edelweiss said in its note.

Premium typically refers to the multiple charges that are levied by the state with respect to approvals for initiating, progressing, and completing the area or additional area in a project.

According to the Deepak Parekh committee, as of date, there are as many as 22 premiums collected in Mumbai under various heads – including FSI, staircases, lift well, lobbies, etc. This is significantly higher than in other comparable top cities of the country. In Bengaluru, developers have to pay 10 different premiums and charges, and in Delhi five and in Hyderabad just three.

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Shekhar Yadav

I am a full time stock market investor. The blog is an extension of my research, thoughts & opinion. Please don't consider anything on this website to be an investment advise.

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