Promote green living spaces
The buzz in the real estate sector today is smart cities and housing for all. But these developments, more often than not, involve a cost, that too an environmental cost. Therefore, the need of the hour is sustainable development which means ‘ development that meets the needs of the present without compromising the ability of future generations to meet their own needs.’ Budget 2015 should,therefore, take steps to encourage sustainable and green development.
Solar panels are used to harness solar energy and convert it to electricity. Many developers are in the process of constructing super structures whose design requires integrating the solar power system. Given the government’s focus on alternative renewable sources, direct and indirect tax incentives could be provided to projects that integrate and provide solar power systems in their design.
Tax holidays to developers
Tax holidays are generally granted to encourage invest- ments in certain industries and geographical areas. Similar tax holidays could be extended to income from development of real estate satisfying green building or natural building norms. Green buildings use a process that is resource-efficient throughout a building’s lifecycle.
Exemptions to end-users
Individual taxpayers could be provided with direct tax benefits for purchasing a property in a development that adheres to green norms. Indirect tax benefits in the form of lower stamp duties could also be provided to encourage setting up a sustainable environment.
Incentivise for green fuels
There has been limited success in harnessing alternate sources of energy and making available energy at reasonable prices. The Budget could propose an integrated energy policy framework that provides tax rebates to real estate developers using renewable energy in green building developments.
R&D of eco-friendly materials
There are certain tax deductions allowed on payments made to institutions engaged in conserving natural resources. Similar deductions could be extended to companies engaged in research and development of eco-friendly materials.