Recovering from the tumbles of demonetization, the next thing that the real estate industry looks forward to is Union Budget 2017-18. With lowering of interest rates and transparency brought in by RERA, this year started on a good note, especially for the affordable housing sector. 2017 is supposed to be the year of institutionalization and strengthening of the buyer-builder bond along with a focus on increased affordability.
The real estate industry expects a lot from the Union Budget that is to be announced by Finance Minister Arun Jaitley on 1st February.
Let’s talk about the wish-list of real estate sector-
Tax Incentives for First-Time Buyers
The government is pacing up to bring more affordable housing benefits for homebuyers. Developers are already coming up with more low-cost inventory. Affordable housing schemes like Swabhimaan have also been launched to allow mid-segment buyers to buy their dream home in prime cities.
Providing income tax incentives to first-time homebuyers over and above these benefits will encourage more people to buy houses. Such changes in the tax slabs are pretty much on the cards that will allow young working class to look upto real estate as an avenue for investment as well as end-use. Higher savings can be allowed with reduction in stamp duty charges and increasing the tax deduction limit for housing loans.
Focus on Infrastructure Improvement
Infrastructure has been the core of the last two budgets and huge amounts of infrastructure improvement are expected to be announced this year, as well. Special attention is required in smaller and developing regions of the country including those falling under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT). The Infrastructure Investment Trusts (InvITs) need to be promoted to enable direct investment of small amounts from possible individual or institutional investors.
Clarity on GST
Though the Goods and Services Tax (GST) structure has already been announced, the industry is eagerly waiting for more clarity about the rate that is to be applied on construction and real estate industry. Proper implementation rules should be announced for the sector. Government also needs to work on Single Window Clearance for real estate.
Favourable Policies for Allied Industries
Allied industries have major impact on the cost of housing units in the country. So we need policies to standardize construction materials in order to bring better balance in the sector. If favourable incentives for cement, steel and other construction material industries are announced, it will have direct benefits on property sector.
Widening the Scope of PMAY
Recently, PM Modi announced certain interest rate subsidy for the Economically Weaker Sections (EWS) and Lower Income Group (LIG), under Pradhan Mantri Awas Yojna (PMAY). The industry is looking forward to a clarification as to who can avail benefits under the scheme. There are young professionals who are looking forward to buy a house in urban areas but they can’t get benefits under the scheme as they don’t fall in EWS or LIG category. Incentives should also be offered for them. Moreover, such affordable homes are launched in the suburban regions or Tier-II, Tier-III cities mostly; more affordable projects should be developed in prime areas.
The real estate industry might not see direct rules pertaining to it. However, a number of indirect reforms like tax saving, reduction in interest rates, etc., will improve the purchasing power of people which in turn will encourage them to invest in property. Also, big projects and higher spendings are likely to be announced for the infrastructure industry.
Read More About…..RERA and Demonetization Worked in Favour of Affordable Housing in NCR