'State Taxes, BMC Fees Among Key Reasons For Sharp Rise In Home Prices In Mumbai,' Says Deputy CM Eknath Shinde

Mumbai: In a rare admission, the Maharashtra government has acknowledged that taxes and fees imposed by itself and local bodies significantly contribute to the rising cost of housing units. Deputy CM Eknath Shinde, who also heads the Housing and Urban Development departments, stated that the prices of residential flats in Mumbai and other cities continue to rise partly due to these levies.

Responding in writing to a question regarding the nearly 30% gap between construction costs and the final sale prices of housing units—often leading to hefty builder profits—Shinde provided a detailed explanation.

He noted that in addition to the rising prices of key construction materials like cement, steel, bricks, and sand, several statutory costs were also pushing up prices.

These include the GST, cess for construction labour welfare, royalty charges, insurance, and the increased premiums levied by local civic bodies.

Shinde’s reply amounts to an open admission that government taxes, fees, and civic body premiums—especially by the Brihanmumbai Municipal Corporation (BMC)—are contributing to Mumbai's escalating housing prices.

The query, raised by legislators Satej Patil, Ashok alias Bhai Jagtap, Abhijeet Vanjari, and 13 others, sought clarity on how the state intended to regulate housing prices and questioned whether the increase in Ready Reckoner (RR) rates was exacerbating the problem.

Defending the RR rate hike, Shinde stated that it was implemented for the first time since 202223, with a 4.39% increase for Mumbai. He clarified that RR rates—used to determine the base value of property—remain significantly lower than open market prices.

Additionally, the Deputy CM pointed out that MHADA sold 2,030 housing units in Mumbai in 2024 at prices 30% to 40% lower than prevailing market rates, highlighting the government’s efforts to provide affordable housing.

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