Developers in Punjab oppose new levy on property transactions
Chandigarh: Developers in Punjab has opposed the state government's move to levy social infrastructure cess on property transactions, saying it would hit demand in the sector which is already facing slowdown.
"The imposition of (social infrastructure) cess is not a right move by the Punjab government as it will further aggravate realty's woes," Confederation of Real Estate Developers' Associations of India (CREDAI), Chairman (Punjab), Anil Chopra has told.
Punjab cabinet yesterday decided to levy social infrastructure cess for health and education at a rate of 1 per cent on property transactions, besides raising the ceiling of registration fee from Rs 30,000 to Rs 2 lakh. Proposal for increasing mutation fees at 'Fard kendras' has also been approved.
The Punjab government with these proposals would fetch additional revenue of Rs 480 crore from real estate sector.
Terming the current phase in the state's realty sector as the 'worst', Chopra said property transactions were already not happening because of weak sentiments and depressed demand.
Chopra said the poor demand in realty sector could be gauged from the fact that the collector rates at several places are more than the market rates.
The Punjab government had hiked the collector rates manifold in April this year in a bid to raise its revenue from real estate sector. Punjab levies stamp duty at a rate of 6 per cent in rural and 8 per cent in urban areas.
Asserting that the imposition of new cess at this point of time was not a right step in the wake of sagging demand, real estate company Hexagon, AGM, D L Banga said the real estate market was already marred by oversupply of apartments and plots.
"Real estate investors are not participating in property transactions, which have contributed in slowing down of demand. Only end-user is in the market which wants to buy only ready-to-move in houses," Banga said.
Punjab's real estate market has not been growing for the last over 10 months and sentiments remained subdued.