Wednesday, February 9, 2011
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New Levy to drive Property Prices in Punjab
The new government levy for residential or commercial projects in municipal areas will drive property prices. With the present high input cost, the rise could be as high as 20% in the near future.
The Department of Local Government, Punjab, has recently imposed Processing Fee (PF), External Development Charges (EDC) and Change of Land Use (CLU) for real estate projects falling in municipal areas across the state in order to augment the financial resources of Urban Local Bodies(ULB).
As per the notification, the department has imposed a fee of minimum of Rs 1 lakh per acre (4,840 square yards) to the maximum of Rs 15 lakh per acre on residential projects depending upon areas under municipal authorities across the state.
Maximum charges have been levied on Dera Bassi, Zirakpur, Kharar and Banur, which are situated on the periphery of Chandigarh. New commercial projects starting from Rs 10 lakh per acre to Rs 1.30 crore per acre have attracted highest charges. These charges would be enhanced by 10 per cent every year by the state authorities.
The real estate developers are not happy with the same. In the recent past , cement prices increased by Rs 25 per 50 kg to Rs 275 while rates of bricks have jumped to Rs 4,500 per truck from Rs 3,500 per truck. Steel prices have increased to Rs 42 per kg from Rs 30 per kg four months back. This move is set to impact Real estate developers margins and they may resort to price hikes to protect the same.
A few developers have already started increasing the rates of their projects in the state. "I have already raised the price of my flats (100 square yards) in Kharar from Rs 16 to Rs 18 lakh and will further raise rates to Rs 21 lakh next month," said a Kharar-based real estate developer.
The Department of Local Government, Punjab, has recently imposed Processing Fee (PF), External Development Charges (EDC) and Change of Land Use (CLU) for real estate projects falling in municipal areas across the state in order to augment the financial resources of Urban Local Bodies(ULB).
As per the notification, the department has imposed a fee of minimum of Rs 1 lakh per acre (4,840 square yards) to the maximum of Rs 15 lakh per acre on residential projects depending upon areas under municipal authorities across the state.
Maximum charges have been levied on Dera Bassi, Zirakpur, Kharar and Banur, which are situated on the periphery of Chandigarh. New commercial projects starting from Rs 10 lakh per acre to Rs 1.30 crore per acre have attracted highest charges. These charges would be enhanced by 10 per cent every year by the state authorities.
The real estate developers are not happy with the same. In the recent past , cement prices increased by Rs 25 per 50 kg to Rs 275 while rates of bricks have jumped to Rs 4,500 per truck from Rs 3,500 per truck. Steel prices have increased to Rs 42 per kg from Rs 30 per kg four months back. This move is set to impact Real estate developers margins and they may resort to price hikes to protect the same.
A few developers have already started increasing the rates of their projects in the state. "I have already raised the price of my flats (100 square yards) in Kharar from Rs 16 to Rs 18 lakh and will further raise rates to Rs 21 lakh next month," said a Kharar-based real estate developer.
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