The Budget 2019 is expected to alter real estate dynamics and create a win-win situation for both the homebuyer and builder fraternity.
Real estate is a crucial sector that makes 6-7 percent of the country’s GDP and generates a handsome amount of employment opportunities. In total, it provides livelihood to over 50 million people in the country and is expected to witness dynamic growth in the next four to five years.
However, the last two years have been challenging for the Indian real estate sector. The realty market has experienced some dynamic reforms in the previous couple of years which have elicited mixed results for the sector. While the demonetisation substantially slowed the real estate momentum by reducing the cash flow in the economy, RERA strengthened the consumers footing. Thus, more stable and consumer-friendly policies are required on a macro level to enhance the realty demand and boost the sector further.
Introduction of the GST, capital gains tax, stamp duty and others have hampered the perception of the consumer towards the sector. It would thus, not be wrong to say that an additional tax rebate would help in raising the confidence of a new homebuyer. Furthermore, multiple taxes levied on the property purchased such as GST, registration, and stamp duty, increases the cost of the property in an unimaginable way, resulting in consumers stalling their purchase decisions. Tax rebates on this or subsuming stamp duty under GST will help the sector immensely.
Increase in income tax deduction limit
Realtors also yearn for an increase in the income tax deduction limit for individuals who make regular interest payments against loans taken for acquisition or the construction of the property. The tax deduction limit has recently witnessed an uptick – from Rs 2 lakh to Rs 5 lakh per annum; paving the way for a positive shift in the industry. This constructive change will fillip property sales, as it will help homebuyers save significantly on home loans.
Rationalisation of GST
Real estate developers want rationalisation of GST for under-construction properties. Post GST implementation, the tax levied has risen to as much as 18 percent, discouraging homebuyers and investors, alike. The ideal slab concluded by realty players is 12 percent, and thus, the government should mull over reducing the GST as required.
Added incentives and faster approvals
Last but not the least; every realtor’s vision coincides with the government’s initiative to deliver ‘Housing for all by 2022’. The demand for affordable housing is increasingly becoming one of the fastest growing campaigns in the country. However, despite the huge demand, multiple hurdles attached have left developers hesitant to enter this segment. The execution of the ambitious project has been considerably slow. Overall, the progress of the project depends on the development of urban infrastructure and fast-tracking regulatory approval procedures. It is essential to remove these roadblocks in order to attain the potential growth in real estate.
The points mentioned above, if adopted in the Budget 2019, will help address the sector’s pangs and will make it easy to operate and serve better to both the community and the economy as a whole.
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.