Shares of real estate companies gained on Thursday with the Nifty Realty index surging over 2 percent after the Maharashtra Cabinet approved the proposal to cut real estate premiums by 50 percent till December 31, 2021, as recommended by Deepak Parekh Committee.

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Shares of Godrej Properties, Oberoi Realty, Indiabulls Real Estate, Sunteck Realty, Mahindra Lifespaces, Prestige Estates, Phoenix Mills traded over 4-7 percent higher.

On Wednesday, the Maharashtra government approved to reduce the premium on real estate projects by half till December 31, 2021. In a meeting chaired by chief minister Uddhav Thackeray, it was decided that developers availing of the scheme would have to pay full stamp duty and registration charges on behalf of homebuyers.

The Deepak Parekh Committee recommended a 50 percent discount to be given on all the various premiums levied by the state government on construction projects till 31.12.2021 and also concessions in the premiums levied by all planning authorities/local administrations at their level.

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50% cut in premium is much needed for real estate sector, says ASK Group

The decision has been taken to boost the real estate sector hit by the coronavirus pandemic. Experts have termed it as an encouraging move by the Maharashtra government.

“This move will go a long way in expediting the project completion and the industry will witness new launches in the market. The industry applauds this booster dose making many projects viable and we shall adhere to the rules laid down in lieu of availing these benefits. Also, the reduction in premiums for new launches will help the development at the lesser input cost and over a period of time there is a possibility of lower price for new inventories that shall come into the market,” said Dr Niranjan Hiranandani, President NAREDCO.

The move comes after the state government reduced stamp duties to boost residential sales.

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(Edited by : Ajay Vaishnav)