Bud­get sup­port for af­ford­able hous­ing in­creases

The fresh sup­port to the af­ford­able hous­ing sec­tor is a big plus for the realty sec­tor in the bud­get this year, while other ex­pec­ta­tions of the sec­tor have been left out of the bud­get pro­pos­als

Hindustan Times (Chandigarh) - Estates - - HT ESTATES - HT Es­tates Cor­re­spon­dent ht­es­tates@hin­dus­tan­times.com

For the real es­tate sec­tor, the Union bud­get 2018 con­tin­ues the cen­tral govern­ment’s sup­port to the hous­ing for all mis­sion, and af­ford­able hous­ing.

Last year, sev­eral mea­sures like the Credit Linked Sub­sidy Scheme (CLSS) and the re­duc­tion of GST (Goods and Ser­vices Tax) from12% to an­ef­fec­tive rate of 8% were weaved around the govern­ment sup­port to the af­ford­able hous­ing.

“A sim­i­lar trend is vis­i­ble in this bud­get where the af­ford­able hous­ing fund un­der Na­tional Hous­ing Bank (NHB) has been cre­ated as a part of the pri­or­ity sec­tor lend­ing,” said Shishir Bai­jal, chair­man and man­ag­ing di­rec­tor, Knight Frank In­dia.

The sup­port to the af­ford­able hous­ing, “Would kick-start the real es­tate in Tier 1 and Tier 2 cit- ies along with new mush­room­ing ar­eas in ma­jor cities as well. In­creased in­vest­ments and num­ber of air­ports may boost Aerotro po­lis projects ,” said, Kushagr An­sal, pres­i­dent, CREDAI (Con­fed­er­a­tion of Real Es­tate De­vel­op­ers As­so­ci­a­tion of In­dia) Haryana. The am­bit of the af­ford­able hous­ing has con­sis­tently widened, cov­er­ing from smaller sized res­i­den­tial prop­er­ties to the mid-sized prop­er­ties, and in­comes rang­ing from eco­nomic weaker sec­tions, to an an­nual in­come of ₹18 lakh.

The bud­get also ad­dressed the anom­aly un­der Sec­tion 43 CA to tax real es­tate trans­ac­tions at their real value rather than the value ar­rived at by ap­ply­ing ar­ti­fi­cially higher cir­cle rates. “As per new an­nounce­ment, if the cir­cle rate does not ex­ceed 5% of trans­ac­tion value, no ad­just­ment is re­quired to­wards the cap­i­tal gains on a real es­tate trans­ac­tion. It will help in terms of some ex­tra sav­ings if there is par­ity be­tween the mar­ket rates and the ready-reckoner rates. Cities which are not un­der the heavy in­flu­ence of real es­tate in­vestors and where prices are ra­tio­nal may ben­e­fit from this an­nounce­ment,” said Anuj Puri, chair­man, ANA ROCK Prop­erty Con­sul­tants.

Another­pos­i­tive for the realty sec­tor is bud­get of­fer­ing greater par­ity be­tween the sec­tor and the equity mar­kets with im­po­si­tion of long term cap­i­tal tax on the eq­ui­ties. “Re-in­tro­duc­tion of long term cap­i­tal gain tax in eq­ui­ties will make real es­tate a more at­trac­tive as­set class com­pared to last year,” said, Pra­teek Mit­tal, chair­man, Real Es­tate and In­fras­truc­ture North In­dian Re­gional Coun­cil, Assocham (As­so­ci­ated Cham­bers of Com­merce and In­dus­try of In­dia).

In­crease in the num­ber of tax- pay­ers since last year is also pos­i­tive de­vel­op­ment for the sec­tor. “With the mas­sive crack down on black money, the tax­payer base has in­creased sig­nif­i­cantly. This is, at least in­di­rectly, good news for the real es­tate sec­tor as seek­ing home loans is now go­ing to be easy for a larger set of in­di­vid­u­als,” said Puri.

How­ever, there has been a si­lence in the bud­get on stim­u­lat­ing main­stream real es­tate de­mand. “The sec­tor grap­pling with the re­forms-driven new or­der has been bereft of any mean­ing­ful in­ter­ven­tions that could have been achieved through the bud­get,” said Bai­jal.

The Union Bud­get 2018 cater­ing largely to the ru­ral and agri­cul­tural sec­tor. “While the fi­nance min­is­ter marginally in­cen­tivised the salaried class with a stan­dard de­duc­tion of ₹40,000, with no other sig­nif­i­cant in­cen­tives/ex­emp­tions on the per­sonal tax front there is not much change in the net dis­pos­able in­come. At the cur­rent junc­ture, the sec­tor def­i­nitely re­quired stronger mea­sures to ad­dress some of the per­ti­nent is­sues such as ra­tio­nal­i­sa­tion of stamp duty, stream­lin­ing the ap­proval process through sin­gle win­dow clear­ance, ac­cord­ing in­dus­try sta­tus to the sec­tor etc to bring the sec­tor on the path of re­cov­ery,” said, Neeraj Bansal, part­ner and head-build­ing, con­struc­tion and real es­tate, KPMG, In­dia.

The over­all ex­pec­ta­tions of the realty sec­tor were high which have not been met. “This is likely to im­pact com­mer­cial as well as a res­i­den­tial sec­tor in the coun­try. Much to our dis­ap­point­ment, in­dus­try sta­tus and sin­gle win­dow clear­ance sys­tem could have been the big­gest game-chang­ing re­forms for real es­tate sec­tor which were not even men­tioned in the bud­get,” said An­sal

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