The proposed metro cess in Mumbai and Pune is likely to have a detrimental impact on the residential markets in the regions which are currently recovering, said property consultant firm JLL.
As per reports, an additional 1 per cent cess will be levied on all property purchased from April 1 in Mumbai, Pune and Nagpur.
"While Mumbai recorded 96 per cent of pre-Covid sales in Q4 2021 (compared to Q4 2019), Pune's sales were 252 per cent of pre-Covid numbers. On an annual basis as well, Mumbai and Pune saw sales improve by 30 per cent and 130 per cent on a Y-o-Y basis in 2021," the firm said in a note.
Giving reference to the sales volumes, the firm said it was a clear sign of the demand momentum returning and at a time like this additional cost burden will be felt by the affordable and mid-segment buyers.
"One has to recognise that the RBI has retained its accommodative stance by prioritising economic growth and supported residential sales recovery by keeping the repo rate unchanged, despite inflationary pressures."
At such a moment, the state government could have looked at deferring the metro cess, given the fact that the stamp duty concession is also slated to end by 31st March 2022, it said.
It added while the metro cess will be utilised for infrastructure upgradation, the timing could have been pushed further to allow for a sustained recovery to play out in the residential market.
