ibnlive » India

Jun 06, 2008 at 09:53pm IST

Bangalore realtors want tax break from new CM

New Delhi: Real estate developers in Bangalore have to wait nearly two years for permissions to build a residential building, something they hope Karnataka's brand new CM will change.

Developers are huddled up working on a wish list for the new Chief Minister in Karnataka, a wish list they claim will make realty in Bangalore more affordable.

First and foremost they would like the state taxes on real estate reduced. Currently state taxes amount to 25 per cent of the total price a customer pays while buying a home. Developers want it to be brought down to at least 12.5 per cent

"There is a 9.5 per cent stamp duty, a 12.5 per cent VAT, then there is BWSSB, BMP, KEB, conversion charges, stamp duty, commencement charges, and also katta fees. I'm paying a fee at every step of the way," says CREDAI President A Balakrishna Hegde.

The second request on the list is to reduce the time needed to get clearances for projects in the city.

According to developers, Karnataka is the most difficult state to get permissions for real estate projects, in most cases it takes nearly two years to get a project cleared.

"One entire department is running from pillar to post, getting permissions and sanctions, so a lot of time is lost. I buy land then I have to wait for 18 months for permission, the interest component on the land too becomes a project cost," adds Hegde.

The confederation of real estate developers in the city feel that tackling these two issues will help make real estate more affordable in Bangalore and will directly result in fuelling growth of businesses in the city.