In a rare admission, Maharashtra Deputy Chief Minister Eknath Shinde has acknowledged that taxes and fees imposed by the state government and local bodies, especially the Brihanmumbai Municipal Corporation (BMC), are significant factors driving up Mumbai’s soaring housing prices.
Shinde, who heads the Housing and Urban Development departments, said residential flat prices in Mumbai and other cities continue to rise partly due to these levies. He was responding in writing to a question about the nearly 30% gap between actual construction costs and the final sale price of housing units, which often results in hefty profits for builders.
Besides the increasing prices of construction materials like cement, steel, bricks, and sand, Shinde listed several statutory costs contributing to the spike, including GST, cess for construction labour welfare, royalty charges, insurance, and steep premiums imposed by local civic bodies.
His candid response amounts to an open admission that government taxes, fees, and civic premiums are exacerbating Mumbai’s unaffordable housing crisis.
The query was raised by legislators Satej Patil, Ashok alias Bhai Jagtap, Abhijeet Vanjari, and 13 others, who also questioned whether the hike in Ready Reckoner (RR) rates was worsening the situation.
Defending the RR rate hike, Shinde explained it was implemented for the first time since 2022-23, with a 4.39% increase in Mumbai, but insisted RR rates—which are used to set property base values—are still much lower than open market prices.
Shinde also highlighted efforts to offer affordable housing, noting that MHADA sold 2,030 units in Mumbai in 2024 at prices 30% to 40% below market rates.
