Chief minister Vilasrao Deshmukh on Monday agreed to look into the demand from builders for doing away with the system of double taxation on the value of the property introduced by the state finance department since last budget. Housing department officials said developers have complained that consumers are reluctant to pay 5% stamp duty as well as value-added-tax of 12% on the value of the property. "The VAT was introduced on property value since the last budget. The CM has promised to review the levy of VAT," a housing official said.

The CM was speaking at the Advantage Maharashtra seminar organised by the Maharashtra Chamber of Housing Industry and Confederation of Real Estate Developers Association of India on Monday.

Deshmukh also assured developers that provisions under Maharashtra Ownership of Flats Act (Mofa) would be suitably amended to reflect changes in the real estate sector. For instance, the Mofa makes it mandatory for a builder to start process of society formation after construction of ten flats. However , that is not possible in the context of big housing complexes which have hundreds of flats that are completed over two or three years.

Focusing on the 'common man' before next year's elections, Deshmukh pledged to mark 2009 as the year to achieve "Housing for All". Deshmukh invited private developers, anyway reeling under a slump in demand for premium flats, to partner the state government in creating mass housing schemes for the aam aadmi.

Deshmukh said India has a shortage of 27 billion homes for the average buyer. Maharashtra, thanks to the rapid urbanisation which has now touched 42 percent, accounts for a big share of the nationwide shortage for homes, he added.

In this backdrop, Deshmukh said the state has decided to build 10 lakh low-cost homes in the next two years. "But the state cannot do such a big task on its own. The need of the hour is to promote public-private-partnership (PPP) in creating affordable housing stock," he said. These homes would be targeted towards economically weak and socially backward people in general.

Sources said state agencies like the MMRDA, Cidco and Mhada would be encouraged to partner with big private developers to undertake mass housing schemes.