The Union Budget raises expectations of individuals, industries and allied sectors to get the requisite support from the government. This year, too, realty stakeholders are keeping high hopes from the government. Let's take a look at the top demands of the real estate industry stalwarts.
The real estate sector has been substantially contributing to the growth and development of the nation. Therefore, it is essential that the government gives adequate heed to the ongoing issues in the sector and deliver solutions that not only fix the teething problems but also trigger realty momentum.
Tax-free housing sector- Dwelling is one of the fundamental rights of a human being, and the government should realise that the housing sector should be tax-free now. Currently, the builders pay multiple taxes on raw materials and construction, which multiplies the tax burden both on the builders and the buyers. Thus, it is imperative that the government chalks out measures which either makes homebuying tax free or minimises the duty burden. This is also essential to achieve the ambitious mission of housing for all by 2022.
A tax-free housing sector will ensure massive support to the construction industry and the end customer. A buyer generally takes a home loan to purchase a his dream house and pays substantial interest to banks which can be financially straining. Withdrawing the taxes levied on a home purchase or offering significant subsidies would reduce the financial outlays and would be a big boost to the housing sector and the first-time homebuyers.
Hike in subsidy- The government should also contemplate on raising the subsidy criteria for the first-time homebuyers. Presently, homebuyers get maximum benefit up to Rs 2.67 lakh as interest subsidy under Credit-Linked Subsidy Scheme (CLSS) of Pradhan Mantri Awas Yojana (PMAY). But, this is not sufficient for homebuyers since it is only applicable on smaller units. Hence, the government should consider doubling both the subsidy and the unit size to cater to the larger segment of homebuyers.
Industry status- After the implementation of RERA, transparency and responsibility has increased in the real estate sector. The States and the Centre, both are working together to ensure construction of projects within the promised deadline. But, the high cost of finance still stands as a massive roadblock in the path of speedy project deliveries.
Hence, it is crucial that the housing sector should be awarded an industry status. The industry status would not only aid in low-cost funding, but land acquisition for project developments would also become easier.
Only affordable housing has been granted an an industry status. Therefore, all the other realty projects get fund on high-interest rates that affect projects costs. As of now, the real estate is complying with all the regulatory norms announced by the government but is still failing to avail the desired facilities. Thus, it is high time that the government focuses on pain points of realtors and offers permanent solutions.
Document clearance- Time plays a significant role in project cost. Delay in project approvals not only pushes the project timelines but also increases project costs. Thus, single window clearance is another critical demand of the real estate sector from the upcoming Budget 2019-20.
Real estate projects require 25 odd clearances from various government departments which tend to push the project timelines by 18-26 months. In the age of digital payment, document approval should be time bounded and expedited.
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.