PANAJI
Although, union finance minister Arun Jaitley had announced in his budget that there will be tax exemptions on affordable housing projects with flats of 60 sq mt carpet area or less, builders remain skeptical because they aren’t sure if this will really make housing more affordable in the state.
Rajendra Talak, owner of Talak Constructions, said, “Jaitley’s announcement may give a fillip to affordable housing, but only in villages of Goa where the land price is in the range of Rs 5,000 to Rs 8,000 sq mt. But, the problem is people are moving away from villages towards cities like Margao, Panaji and Ponda, where the cost of land is very high. When it comes to rural areas, real estate projects come up only in the coastal villages due to tourism there. There are hardly any projects in Sanvordem, Quepem and other rural parts of Goa, which are not coastal.”
Goa is a small state, and ideally speaking, people should be willing to buy a 2 BHK flat, say 25 kms away from Panaji, at less than Rs 40 lakh. But, that doesn’t happen because Goa has a very poor transportation system where bus services along most routes is in a dismal state. In many parts, there is no bus connectivity after 7 pm. This is a huge deterrent to not only the cause of affordable housing, but also for the overall development of the state.
Dr Jagannath (Desh) Prabhudessai, president of the Goa unit of CREDAI said, “In other states, builders often get land acquired by the government on lease. But, that doesn’t happen in Goa, as we end up buying land directly from the owner. Meanwhile, land prices are very high in Goa, as it is not possible to buy land anywhere for less than Rs 20,000 per sq mt.”
When questioned on the availability of land at Rs 10,000 sq mt in places away from Panaji and Margao, Dr Prabhudessai replied, “But, the floor-area-ratio (FAR) there is much less. In Margao Municipal Area, where land price is Rs 20,000 per sq mt, the FAR is 100 per cent. In a village, land price may be Rs 10,000 per sq mt, but a builder will not be able to construct much if the FAR is just 60 per cent, and this will push up the flat price.”
Apart from land price, the cost of construction stands at Rs 15,000-18,000 per sq mt in Goa. On the top of it, all taxes, put together, amount to Rs 7,000 per sq mt. Talak said, “The government can consider bringing down the taxes, if affordable housing is to be promoted. Its only when the taxes are brought down that we will be able to make use of FM’s budget scheme.”
