The Indian real estate segment is truly a function of compound parameters and bearing of the complete economy, this clearly means any overall improvement in the economy, will witness a rub-off effect on the entire property market, thus directly boosting the sector.
The Indian realty segment has high expectations from the forthcoming Union budget of 2019. Industry professionals and stakeholders have high hopes that the Central government will offer some condensation in the rate of income tax, offer more transparency and liquidity on the Goods and Services Tax (GST), lend a positive push to the affordable housing sector, elevate the deduction of House Rent Allowance and state strategies to regulate construction materials in order to further enhance the real estate market in India. The upcoming budget will certainly hold a mixed bag of emotions for the property markets in India.
The interim Budget 2019 will be presented in the Parliament of India on February 1, 2019. From the impending budget 2019, the stakeholders participating in the Indian property market will be looking forward to construction methods that will enhance housing demand by offering affordability in housing options for homebuyers and condensed costs for developers. The expansion of the income tax deductions offered to probable buyers has a scope of incentivising the first-time buyers, thus supporting demand growth. Surplus deductions in the income tax for customers who are keen on investing in housing units that fall under the classification of inexpensive housing can offer targeted support to this section where affordability remains a major constraint on demand. Further, the realty industry might benefit, from any decline in the whole tax outgo due to relaxation in income tax slabs, thus boosting the capability of the salaried class to invest in properties.
Another much-awaited reform which is likely to be executed is the considerable reduction in tax with regards to the under-construction property segment. Real estate stakeholders have been recommending that the GST should be charged at five percent. Besides, they have also suggested a rationalisation of provisions with regards to the transaction in immovable properties. Furthermore, these steps will also play a key role in serving the cause of coming close to fulfilling the Government's mission of 'Housing for All by 2022'. Implementation of these reforms in the forthcoming budget will be a win-win situation for the buyers and developers alike which will also lend a positive push to the overall real estate sector.
The Union Budget 2019 is also expected to efficiently target the affordable housing sector. This sector of real estate is presently limited up to 60 sq m the area only, hence there is a dire need to increase this area limit. Increase in area will lend a possibility for the MIG sector to come under the category of affordable housing which, thus benefitting from the subsidies of the affordable housing category.
The current expectation would be to lower the current rate of GST (12 percent) to at least 6 to 8 percent. Both these above measures if undertaken cautiously shall give a tremendous push to the property market. Moreover, these fundamental steps will also play an important role in serving the cause of comprehending the government’s mission of ‘Housing for All by 2022’ to a great extent because if these steps are executed, then the buyer community will be in a much better position for buying and investing in properties. Any positive development that has been introduced and brought about in the affordable housing zone will indeed come as welcome news for property developers.
Another pre-budget expectation would be to grant infrastructure status to the construction industry, a demand which has been pending since long. Overall the Union Budget 2019, is slated to unquestionably be a landmark reform, pointing out towards an incessant progression in the Indian realty segment.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. 99acres does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.