Reducing Levies and Fast Tracking Approvals: The Key to Boosting Mid-Income Housing

With luxury and premium housing on the rise, mid-income housing is struggling due to high interest rates and lower supply in top cities. Developers say reducing levies and fast-tracking approvals can help revitalize the sector.

Mid Income HousingReal EstateLeviesApprovalsAffordable HousingReal Estate NewsJun 16, 2024

Reducing Levies and Fast Tracking Approvals: The Key to Boosting Mid-Income Housing
Real Estate News:The Indian housing market is experiencing a dichotomy, with luxury and premium housing segments witnessing strong growth, while mid-income housing is facing headwinds. Developers and consultants believe that state governments can play a crucial role in reviving the mid-income housing sector by reducing levies and fast-tracking approvals.\n\nNiranjan Hiranandani, Managing Director at Hiranandani Group, emphasized that high levies and approvals constitute more than 50% of the cost of a house in big cities. He suggested that states should follow Maharashtra's example of cutting stamp duty, which improved residential sales in the state.\n\nSanjay Dutt, Managing Director and CEO at Tata Realty & Infrastructure, highlighted the need for single-window clearance for projects, citing the complicated approval process that involves obtaining multiple clearances from various government agencies. He noted that this leads to extended project timelines and increased costs.\n\nGaddipati Hari Babu, President of National Real Estate Development Council, pointed out that many states are charging 12 to 14% as different levies on the selling price, which is in addition to the 5% stamp duty. He advocated for reducing levies to a maximum of 10-12% to increase sales and generate more revenue.\n\nAnuj Puri, Chairman of Anarock Property Consultants, stressed that reduced stamp duties and registration fees can increase demand by making housing more affordable. He also emphasized the need for streamlined lending procedures and provision of more subsidies or incentives for first-time homebuyers.

Frequently Asked Questions

What is the current state of the Indian housing market?

The Indian housing market is experiencing a dichotomy, with luxury and premium housing segments witnessing strong growth, while mid-income housing is facing headwinds.

What are the major challenges facing the mid-income housing sector?

High interest rates and lower supply in top cities are the major challenges facing the mid-income housing sector.

How can state governments help revitalize the mid-income housing sector?

State governments can help revitalize the mid-income housing sector by reducing levies and fast-tracking approvals.

What is the impact of high levies on the cost of a house?

High levies and approvals constitute more than 50% of the cost of a house in big cities.

How can the approval process be improved for mid-income housing projects?

The approval process can be improved by implementing single-window clearance for projects and streamlining lending procedures.

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