Representatives of real estate developers in Pune on Wednesday said, the government of Maharashtra and Pune Municipal Corporation (PMC) were jointly responsible for the unaffordable cost of residential and commercial properties as both establishments have irrationally increased the ready reckoner rates, stamp duty registration fees and various other development charges during a slowdown time.
The real estate sector, in India's major information technology hub Pune, has seen a sharp decline in sales figures over last four to five months. While few developers have slashed property rates, others have reduced apartment sizes to make flats affordable.
Speaking to reporters, Promoters and Builders Association of Pune (PBAP) president and chairman of Kumar Builders Lalitkumar Jain said, "The state government has all of a sudden increased the stamp duty on development agreements from the existing one per cent to five per cent. It has also failed to reduce the ready reckoner rates, which is an injustice to flat buyers during a slowdown time." Jain pointed out that the increased stamp duty on development charges would have an additional per suqare foot burden of Rs 30 to Rs 70 on buyers.
He alleged that various charges levied by the state government, PMC and centre constitute up to Rs 400 out of the per square foot rate charged by the developer.
Jain also criticised PMC for increasing a number of premium charges by 130 per cent over last four years to ensure a costly property for flat buyers.
"PMC has unilaterally raised the excavation charges for laying cables under PMC roads from Rs 1,200 per running metre to Rs 4,600 per running metre. Our studies show that Pune buyers have the capability to buy flats but stamp duty and ready reckoner charges are the major hindrances," Jain claimed.
Tax experts say valuation of shares is a grey area and may lead to litigation