Vijayawada: Realtors wary of new Bill

Vijayawada: Without taking measures to control prices of construction material like cement, sand, iron and stones, the new Real Estate (Regulation and Development) Bill-2016, which was passed in Parliament a couple of days ago, would not yield good results, observed realtors at the CRDA, in Guntur and Krishna districts.

The realtors said that the real burden would be on end-user. At the same time, they observed that the Bill ensured interests of buyers only. A builder could not sell the property before completing the construction, observed Mr Tirupati Rao, APREDA Guntur chapter president.

He said that small builders could not start construction, since they have to invest more. The construction cost would increase enormously, which would become a bottleneck for growth of industry, he added.

K. Rajendra, former general secretary of CREDAI, Vijayawada, said that the government ignored controlling of cement, sand and other input costs. He explained that construction material costs and labour charges would increase by the time of completion of the construction. In such circumstances, builders would end up with losses.

He said that cement companies are increasing cost by creating artificial demand, which should be controlled by the government. At the same time, they accepted that this would ensure transparency in each and every transaction, which would benefit the consumer.

So far, builders took money from buyers but not completed the construction as promised. Now, they have to complete construction of a building as they accepted in agreement. For all disputes, there would be a state-level Regulatory Authority, observed Mr Rajendra.

Builders worry about approvals

The mandatory provision of using white mo-ney in Real Estate (Regulation and Development) Bill-2016, is the most worrying aspect than anything else for realtors and other stakeholders. They said if the government insists on using only white money for all transactions related to real estate activities, the market will go down drastically.

The realtors explained that the government already imposed 15 per cent service tax, 7 per cent registration fee, sales tax, VAT, land registration fee, apart from other taxes. Adding to that, to construct a building, the builder has to take various approvals from various authorities, which is an additional burden.

Mr Tirupati Rao explained that if a person wanted to purchase a house worth Rs 50 lakh, he has to pay Rs 7.5 lakh service tax in addition to actual building price.