Chennai
To insulate the poor and the middle-class from rocketing property prices, the state government has announced additional floor space index (FSI) for housing projects catering to the low income (LIG) and middle income groups (MIG). FSI is the ratio of land area to the built-up area.
The government will not levy any premium FSI charges while sanctioning additional FSI for LIG and MIG projects. In effect, the builder — the Tamil Nadu Housing Board or private developers — will be able to construct more built-up area without incurring additional cost on land. It would reduce the cost of such apartments, finance minister O Panneerselvam reasoned out in the budget. The FSI for multi-storeyed buildings is 2.5 while that for a ground floor plus three floors is 1.5. The new FSI guidelines are yet to be announced.
The minister announced a slew of interest waivers on housing loans disbursed by cooperative housing societies. Interest waiver for LIG units is increased from 50% to 75%, for MIG from 25% to 50% and for HIG from 10% to 25%. Also, penal interest has been waived completely. While the government will contribute Rs 390 crore towards interest waiver, the cooperatives will forgo Rs 545 crore penal interest. The interest waiver scheme, to be in force till September 30, is expected to help societies mobilize Rs 665 crore over dues.
The budget dealt a heavy blow to the construction industry, which includes the housing sector, by slapping a 50% increase in infrastructure and amenities charges, commonly known as impact fee, levied on all new buildings constructed in the state. As of now, a multi-storeyed residential building in any part of the state is charged an impact fee of Rs 25 per sq ft.
For multi-storeyed commercial, IT, industrial or institutional buildings, the impact fee is Rs 50 per sq ft in Chennai and Chengelpet regions. In Coimbatore and Tirupur, it is Rs 37.5 per sq ft and in other regions it is Rs 25 per sq ft. A 50% hike in impact fee will translate into an increase of Rs 12,500 to Rs 25,000 for a 1,000 sq ft building depending on the category it belongs to.
“The builder community welcomes the increase in FSI for LIG and MIG housing. It will bring in more housing stock at affordable rates. Tamil Nadu faces a shortage of three million housing units. The government could have avoided increasing the infrastructure and amenities charges. It will lead to increase in prices of apartments,” T Chitty Babu, Confederation of Real Estate Developers’ Association of India, secretary said.
Source: The Times of India, Chennai
