Mumbai: UD eliminates ambiguity over 50% premium payment offer to builder

The state Urban Development Department under-secretary Kishor Gokhale, on Friday, issued a letter to the BrihanMumbai Municipal Corporation (BMC) commissioner, stating that 50 per cent discount on premiums payments is applicable on both new as well as old projects.

Earlier, there was a contention that the benefit has been provided only on projects that commenced from January, 2021, which is not the case. The Maha Vikas Aghadi government in January, 2021, declared a 50 per cent concession to builders on premium payments. Developers, who opt for the discount, however, will have to pay the entire stamp duty when they sell flats to buyers. Builders will have to give an undertaking to the local bodies that they will pay the entire stamp duty and not charge any stamp duty from home buyers, the issued GR stated.

However, the announcement was interpreted in different ways. Therefore, through a letter to BMC, it eliminated the ambiguity. It explained that real estate projects that began after April, 2020, and have to make premium payments can also avail the 50 per cent concession. For the ongoing projects (January 14, 2021), premiums will be calculated as per the rate in the annual market price table applicable at the time of approval. For projects that are applicable on April 10, 2020, or prevailing while paying a premium, whichever is higher, it is expected to calculate the premium according to the rate in the annual market price table and give a 50 per cent discount. Also, the discount on premium payments is offered on direct deposits made up till December 31, 2021, only.

Moreover, the letter reads that facilitating the payment of premium in installments and charging interest on it as well as levying interest / penalty in case of arrears, amongst others, are related to the policy decided at the municipal level. Therefore, the decision is expected to be taken at the municipal level. The government directives does not contain any instructions for granting relief in such interest or penalty amount, it was clarified to BMC.

On the said subject, Anand Gupta, chairperson, Housing and RERA committee of Builders' Association of India (BAI) commented, "The above clarification will remove all ambiguity on the 50 per cent discount offered by the government to builders on premium payments. The association, which is an apex body, appreciates the government’s action to help and boost the moral of industry. The action will help all customers also by way of reduction in prices."

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