Government’s Share of 50 Percent in Property Costs Blocks Affordable Housing: Tata Realty MD Sanjay Dutt

Affordable housing in India continues to face major roadblocks, not just from developers or construction costs, but from the government itself. Speaking at the India Today South Conclave, Tata Realty Managing Director and Chief Executive Officer Sanjay Dutt emphasized that nearly 50 percent of a property’s cost in urban markets goes directly into government taxes, duties, and charges.

According to Dutt, while the Goods and Services Tax on under-construction affordable housing is only one percent, and five percent on other residential projects, that is just the beginning. Buyers are required to pay additional expenses including stamp duty ranging between five and eight percent, registration charges, municipal fees, development cess, and premiums for additional floor space. Industry experts also confirm that when land premiums, approval costs, and compliance charges are added, the government’s share can climb to between 30 and 50 percent of the total cost of housing.

Land prices, Dutt added, represent another crippling factor, often accounting for as much as 85 percent of project costs in major cities. He argued that vast tracts of unused land held by government agencies such as the Railways, Defense, Port Trusts, and municipal corporations must be unlocked and monetized to reduce housing costs. Making land cheaper, he said, would enable private developers to deliver affordable housing more effectively.

Financing challenges and poor infrastructure further complicate the issue. Dutt pointed out that building affordable homes far away from city centers is not a solution if people are unable to commute due to inadequate public transport and weak road connectivity.

Despite tax benefits available for developers, the reality remains that land is scarce, capital is expensive, and urban infrastructure is struggling to keep pace. With buyers forced to shoulder nearly half of their property cost in government-related fees and charges, affordable housing remains out of reach for millions. Dutt’s message was clear: without rationalizing taxes and unlocking land, India’s affordable housing dream cannot be realized.