Confederation of Real Estate Developers Association of India (CREDAI) National President, Lalit Kumar Jain suggested to the Finance Minister to allow tax exemption for small houses of under-60 sq mtr of carpet area and creation of special housing zones with tax exemptions on the lines of SEZ for constructing 45 sq mtr houses for low income groups and 30 sq mtr houses for the economically weaker sections.
Some other key recommendations by Lalit Kumar Jain are:
1. Scrapping of the RBI risk weightage and call for banking reforms
2. Facilitate easy and low-cost funding for housing to encourage developers increase the supply and bring down prices
3. Affordable housing be treated as priority sector and the rates of interest for housing loans should be brought down to an acceptable 7.5 per cent
4. Home loan should cover 90 per cent of the total cost including taxes
5. Special focus on rental housing to serve the needs of a huge section of the population that may not be in a position to immediately buy houses
6. Funds from schemes like Rajiv Aawas Yojana could be made available as slum dwellers’ contribution at the rate of Rs 50,000 per tenement
7. Formation of a proper Real Estate Investment Trust (REIT), CREDAI called for special rental housing projects under the affordable segment
8. All commercial building generating white collar jobs should be incentivised by liberal bank funding and allowed a 50 per cent tax concession under Income Tax Act
9. Reducing FDI eligibility limits by 20 per cent from the existing 50,000 sq mtr and 25 acres to area to be reduced to 20 per cent
10. Launch tax free bonds for housing and make funds available at 5% for affordable housing projects as well as buyers under the segment
11. External Commercial Borrowing (ECB) should be permitted as per the FDI norms and be allowed for housing financial institutions and even for all affordable housing and rental housing projects
12. Comprehensive Voluntary Declaration of Income Scheme to check the curse of black money and improve liquidity
The country’s housing shortage is very high at 18.1 million houses and an incremental need is around another 10 million houses. “It is high time that the government took a pragmatic and practical look at the real estate sector today and take steps that help the industry in particular and the economy in general,” Lalit Kumar Jain said.