Planning To Buy Property In Mumbai? This Concerns You

It is nothing less than a dream come true if you have been able to manage enough money to buy a property in Mumbai, India's financial capital that has the distinction of being one of the most expensive property markets in the world. Data is a witness that despite the several efforts that have been made in the recent past to bring down prices, rates of property in Mumbai have been consistently rising, even if marginally. According to the National Housing Board, between the third quarter and the fourth quarter of the financial year 2016-17, property rates in Mumbai increased 3.6 per cent.

We list certain recent developments in the Mumbai property market that concern you:

MahaRERA to your rescue

Money may not have been the only concern that might have kept you from entering into the property market. It is a widely-acknowledged fact that consumer sentiment took a hit in the recent past as developers struggled to complete their projects and failed to deliver to buyers what they promised. Everyone expected this to change after the Real Estate (Regulation & Development) Act, 2016, came into force. In a first, the Maharashtra Real Estate Regulatory Authority, also known as MahaRERA, recently ordered a developer to return a buyer Rs 20.15 lakh that was paid as advance. This buyer had booked a flat in 2013 and was assured of getting possession of the unit in 2016. Data till August 30 also show that the MahaRERA had registered nearly 12,900 ongoing projects, the highest number of projects registered by a state authority. The precedent set by the state authority would certainly revive the buyers' sentiment.

Ready reckoner rates may be rationalised

The amount that a buyer has to pay as stamp duty and registration charges invariably shoot up the total cost of property purchases. This is why when the Maharashtra government raised the ready reckoner rates for Mumbai property by an average of 3.95 per cent in April this year, the move caused much discontent among the developer community. Earlier, buyers of property in Mumbai had to pay an average five per cent stamp duty.

“The price (ready reckoner rates) ideally should not have been increased as hiking it increases the costs to the buyers. The government should bring it down as it keeps talking about affordable housing, etc. But with this move, I think they don't want prices to come down; they want to do revenue collection,” Hiranandani Group Co-founder Niranajan Hiranandani was quoted by Hindustan Times as saying.

You may like to read: Hiked Ready Reckoner Rate, Additional Surcharge To Jack Up Mumbai Property Rates

Now, the state has pledged to amend rules to rationalise rates to tame the superficial raise in property prices. "In cities like Mumbai and Pune, the increased ready reckoner rates and higher stamp duties often lead to a steep escalation in prices of houses. The municipal corporations' increased premium coupled with the Goods and Services Tax often lead to a cumulative hike in the overall property prices making housing unaffordable at times,” Maharashtra Chief Minister Devendra Fadnavis recently said at a real estate conclave.

“At present, the (Real Estate) Act does not allow governments to intervene in determining the ready reckoner rates for houses/properties. As a result, it has its limitations. The government will bring amendments to the Act,” the CM said.

Property tax relief for those living in small homes

For obvious reasons, small homes are a popular choice for buyers in the Maximum City. Now, dwellers living in homes with a carpet area of 500 square foot (sqft) in the city are set to be exempt from paying property tax if a resolution passed by the Brihanmumbai Municipal Corporation (BMC) gets an approval from the state.  The BMC has also proposed that those living in houses between 500 sqft and 700 sqft get a 60 per cent concession in their property tax. For extending these benefits, the municipal body will have to take a hit of about Rs 450 crore annually. The state will also have to amend the Mumbai Municipal Corporation Act, 1888 to implement the proposal.