The real estate sector saw many ups and downs in the year 2017, whether in the form of Demonetization or announcement of many structural policy reforms which otherwise led to the complete overhaul of the real estate industry. With budget 2018 on its way, the realty sector is restraining its hopes for relief measures like lower taxes and infrastructure status.
Key issues or areas of concern for the sector
Industry Status: It’s been a long pending demand of real estate players that this sector must be allotted an ‘Industry status’. Because of no such status it becomes difficult for the real estate sector to avail legitimate finances from banks and other financial institutions. As per many experts, industry status to the sector can help it in getting low-cost loans and in turn reducing project costs, which will finally benefit buyers.
Single window clearance: According to many developers, right now the most important requirement of real estate sector is a single window clearance mechanism with minimum human interface. In order to bring down the project delivery time, precise deadlines for approvals is very much required. At present, due to lots of permissions and approvals, it takes around 18 to 36 months to get clearance of any project but with single window mechanism, both developers as well as end consumers could get benefit.
Reduction in GST rates: Right now, under-construction properties are charged a GST of 12%, which is significantly higher than the other taxes. So, the realty sector wants that the government should strive to make GST a tax-neutral proposition. Also, clarity and transparency on input tax credit will also help in rationalizing the taxes.
Incentives for green buildings: Due to India’s waning urban environment, this requirement is the need of the hour for real estate market. The marginally higher cost of construction of green buildings has kept a majority of developers away from such projects. So, it’s important that the Government should encourage developers with higher incentives in terms of tax exemption to encourage them to adopt green building technologies.
Increase in limit on interest on home loan: Buying home in still a very time taking task in India especially for a first time buyers. Applying for a home loan, checking eligibility for it sometimes becomes a headache for people. So it’s important that the government should increase the limit of tax deduction for housing loans up to Rs 5 lakh from the present limit of Rs 2 lakh per-annum in order to support millions of first time buyers across the nation.