According to the latest report from Liases Foras, a real estate survey firm, 1.65 lakh housing units are lying vacant in the Mumbai Metropolitan region. The percentage of vacant flats has gone up by 73%.
The state government has decided to introduce taxes on vacant land and apartment in the proposed housing policy. The move is aimed at curbing developers' practice of sitting on excessive land parcels for an indefinite period of time and investors owning multiple apartments,
According to the latest report from Liases Foras, a real estate survey firm, 1.65 lakh housing units are lying vacant in the Mumbai Metropolitan region. The percentage of vacant flats has gone up by 73%.
Maharashtra government has already prepared the draft of the state housing policy. The draft will be published to invite suggestions and objections from stakeholders. The draft says "in order to put the vacant flats and plots, there should be taxation on vacant plots and flats. This will deter the tendency to hold on to the plot and the vacant flat for speculative gains".
Pankaj Kapoor, managing director, Liases Foras, welcomed the state government's decision. He said that if the BJP-led government seriously implements its proposed landmark decision, then the unproductive land and apartments will become productive. "In Singapore, there is 25% tax on vacant lands. If the land is not utilised then the total cost of the land gets wiped out in the next five years. Singapore and other developed cities where the vacant land taxes are stringent, land utilisation is quite productive," he said.
On the contrary, according to Kapoor, in India most of the developers, politicians and investors are using their black money for buying land or flats in bulk. "It leads to crony capitalism. As a result of it, genuine people are deprived of getting the roof over their head," Kapoor said.
He said if this vacant land tax is imposed and sincerely implemented, the black money market in the real estate sector will be also systematically curbed. "Because of this decision, no one will own more than one or two houses. Currently, everyone wants to park their money in real estate. There are many buildings which have been vacant for several years now, and these buildings are now known as ghost buildings. Such things should be stopped," Kapoor said.
Senior government officials said that this is just the proposed draft. "We have not yet decided on the percentage of tax that needs to be imposed on vacant land and apartments. The rules and guidelines will also need to be prepared. We have been talking to all stakeholders, and the final decisions will be taken by the chief minister," said an official, who spoke on condition of anonymity.
Paras Gundecha, chairman at Gundecha Developer Group and former president at Maharashtra Chamber of Housing Industry, expressed his disappointment over the policies of the state government, calling them anti-development. He said they had expected the good days after the new government took over in the state, but the BJP-led regime is adopting anti-development policies. "It will devastate the construction industry. People will stop putting their money in real estate. A slew of approvals are needed before a project is executed. There are many challenges. We have to run from pillar to post to get the files cleared. Besides, many land plots are mired in litigation," he said.
Moreover, Gundecha said, there are people who are buying the houses for their daughters or sons who are settled abroad but would want to come back some day. "So, how would these people buy houses now?" Gundecha asked.
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