The real estate sector has been in the doldrums for the last two years or so. The sector has high expectations from the upcoming Union Budget 2016. Some announcements that are expected to cheer up the sector include:
An industry status for the real estate sector will finally ease off the financing burdens being witnessed in the country. It is imperative to do that as real estate happens to be one of the most significant revenue generators of India, hence boosting buyer confidence, both in the domestic as well as in the NRI segment.
Appointment of Regulatory Body
As the sector does not have an industry status there is no regulatory body appointed yet. Once done, much higher degree of transparency shall prevail for both customers and developers finally improving the bond between the two stakeholders.
Single Window Clearances
In the absence of a single window system developers’ profitability suffer which ultimately leads to delays in project deliveries. The implementation of single window clearances will ease off the whole project cycle.
Goods & Service Tax Implementation
A clear line of path for the implementation of the GST Bill shall help in overall increase of transparency in the system. This will be a welcome announcement for the buyers as they would be required to pay only one tax instead of numerous ones.
REITs Tax Exemption
Even though the REITs guidelines have already been laid out, due to the Dividend Distribution Tax (DDT) bottleneck it has not been able to attract much interest from the industry. The tax exemption shall increase the flow of investments in India.
Housing Loan Tax Exemption Limit
Tax deduction limit for housing loans is currently Rs 2 lakh, which is very small as compared to the prevailing property rates. The enhancement of this limit to match the inflationary trends in a financial year should be focused upon.
Tax concessions on house insurance premiums should be introduced to encourage end users.
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