Affordable housing is the need of the hour for India and at present, the segment requires tremendous stimulus to become a reality. Ahead of the Union Budget 2017-18, real estate industry suggests key policy reforms that are essential to promote affordable housing.
Housing for All by 2022 and affordable housing have become parlances under the current government at the Centre. The previous budget sessions under their governance were seen taking reformative steps towards making it a reality in India. However, real estate experts and enthusiasts feel there are still several hurdles to be surmounted before we hit the bull’s eye. All hopes are pinned on the upcoming Union Budget 2017-18, which is anticipated to bring more clarity as to where the realty sector is headed this year.
Voicing his expectations, Mudhit Gupta, CMD, EMGEE Group says, “We are looking forward to the Union Budget for interesting incentives towards low-cost housing. We propose that the tax free slab be raised from the current level to about Rs 5 lakh and a tax rate cut for personal and corporate taxes be issued. The stamp duty charges should be reduced down to two percent from the current five percent to encourage frequent transactions. We also hope the stamp duty is waived off for affordable housing in the Pradhan Mantri Awas Yojana (PMAY).”
The PMAY or Housing for All mission currently benefits only the Economically Weaker Sections (EWS) and Lower Income Groups (LIG). Emphasising on the need to augment the beneficiaries under the scheme, Deepak Kapoor, President CREDAI-Western UP and Director, Gulshan Homz says, “There is a large segment of youth population which is in dire need of an abode at low cost and they do not fall under the EWS and LIG categories. This Budget must focus on providing such benefits to the masses and provide clarity over projects that have been covered under this scheme.”
The next most awaited reform is the Goods and Service Tax (GST) Bill. The rate at which the GST is set for real estate will pave the way forward for affordable housing in the country. PNC Menon, Founder Chairman, Sobha Group opines, “It would be beneficial if homebuyers can come under the lowest possible slab of the GST, thereby, enabling greater affordability.”
Affordable housing is an all-encompassing concept, which in order to become a reality, needs tremendous stimulus. A few other suggestions that Rohit Gera, Managing Director, Gera Developments and VP, CREDAI – Pune has extended ahead of the mega-event are –
- Widening the scope of the tax free status for projects which currently require 90 percent of the project potential to be developed within three years. This is a deterrent for large-scale projects as it is virtually impossible to complete these projects within this time span.
- Encouraging the supply of rental housing and increasing the standard deduction available for rental income.
- Creating an environment conducive for absorption of the existing inventory available in the market
All hopes of a turnaround in affordable housing are pinned on the Budget. If government announces relevant subsidies for this segment to grow, the developer fraternity would also seriously consider setting up more units across this residential category.
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