Home buyers will soon have to shell out a heavier sum. The reason behind this is that the government has decided to impose a charge on real estate developers to give road connectivity to new properties. And, most of the developers that FE spoke to said they will increase the sales price of houses to make up for this fee.
The main impact of the move will be on people purchasing homes near national highways as these locations have good connectivity with cities. If a developer wants the government to provide roads near real estates that are being built at other locations, then also the realtor has to pay a fee to the authorities.
At present, metropolises don’t have much space for residential properties and companies are building most real estates outside the main cities. The unique selling proposition of these properties, as claimed by builders, is the proximity to national highways.
Although these homes are selling like hot cakes, they are lacking in quality roads connecting them with the main highways. ??The work of building these roads are in the hands of the government. But the authorities are not very keen and don?t build the ?approach road? in a time-bound manner,?? an official of a leading real estate company told FE on the condition of anonymity.
The original idea of imposing the connectivity charge came from the finance ministry. ??The general view in the government is that if there is any private use of public properties, there should be a revenue generation to the government. It may be in form of tax or cess,?? a senior government official told FE.
The Road Transport and Highways Ministry, which is responsible for building roads, has held a series of meeting with real estate developers and officials from other ministries and has decided to recover Rs 250 per square meter of road that is built to connect the property. When contacted by FE, Road Transport and Highways secretary Brahm Dutt denied any such development. But officials in his ministry confirmed the move.
As far as the real estate industry is concerned, it welcomed the decision and said that homes will sell faster even as the prices will be hiked.
Country?s largest real estate developer DLF’s executive director Rajiv Talwar told FE: ??It?s a good development. At least, the government is making it transparent.
The charge will be factored in but the overall impact on home prices will not be as high for buyers as the virtual cost of not getting the road connectivity??.
