In a move that could further impact the cost of living in Ahmedabad, the Ahmedabad Urban Development Authority (AUDA) has recently announced its decision to raise development charges by a significant margin. The proposed increase would see development charges surge by 15-20 times the current rates, potentially burdening property owners and developers alike. With development charges being a crucial factor in the overall cost of construction projects, this move is expected to have far-reaching implications for the real estate sector and urban development in Ahmedabad.
Ahmedabad is set to witness a significant impact on the cost of real estate projects following the recent implementation of new jantri rates in April. Additionally, the Ahmedabad Urban Development Authority (AUDA) has announced its decision to substantially increase development charges, raising them by 15-20 times the existing rates.
Experts predict that the combination of higher jantri rates and the proposed hike in development charges by AUDA will lead to a surge in property prices within both AUDA and Ahmedabad city areas in the coming months. These revised rates will also be applicable in the jurisdiction areas of the Ahmedabad Municipal Corporation (AMC).
AUDA's plan to raise development charges for land and construction was formulated in March, with a proposal made public on June 13. The authority has invited public suggestions and objections for the next three months before submitting the proposal to the state government for final approval and subsequent implementation.
Sources reveal that AUDA had initially proposed an increase in development charges to the state government five years ago, but no decision was reached at the time. As a result, AUDA's board meeting in May this year approved the cancellation of the old proposal and the formulation of a new one.
Under Section 99 of the Gujarat Town Planning and Urban Development Act 1976, local authorities have the power to levy development charges within their jurisdiction. Section 100 of the act allows for the establishment of maximum development charges. Previously, the state government charged Rs 50,000 per hectare or Rs 5 per square meter for land and Rs 15 per square meter for construction. AUDA had planned to charge varying development fees based on construction purposes, ranging from Rs 2 to Rs 5 for land and Rs 15 for construction.
However, a law amendment by the state government on July 28, 2017, authorized authorities to increase development charges to a maximum of Rs 100 per square meter or Rs 10 lakh per hectare. Consequently, AUDA proposed new rates for development charges, submitting a revised proposal to the state government on March 8, 2018, which doubled the development charge rates. Despite the submission, the state government remained undecided on the matter for the past five years.
Sources indicate that the recent implementation of new development charges by the Navsari Urban Development Authority prompted AUDA to withdraw the previous proposal and submit a new one with revised rates.
During its board meeting on June 13, AUDA finalized the new development charges for land and construction, and the proposal will now be forwarded to the state government for final approval. It is worth noting that AUDA's proposal emphasizes the collection of Rs 30.55 crore in development charges over the past decade.
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