Indian Union Budget 2021-22: Hit difficult by the Covid-pandemic and the subsequent lockdowns, the nation’s genuine estate sector is betting large on this year’s price range for revival of fortunes. Given that the sector contributes more than 8% to the Indian economy, it has justifiable expectations from the Budget 2021.
Industry authorities say this year, the want list for the price range is going to be extended for the genuine estate sector, especially when this sector generates second highest employment. As the government is generating all efforts to minimise the pandemic’s effect on economy and give it a increase, there is a require to spur customer demand and give the realty sector a large shot in the arm.
In truth, in a bid to beat the unprecedented effect of COVID-19 on the all round economy and the realty sector, a variety of measures had been announced by the government in 2020, such as a six-month moratorium on EMIs and restructuring of loans of genuine estate providers at the project level.
“These measures were proactive and commendable, but not enough, given the depth of pain in the real estate sector. The housing industry needs focused measures to further bolster demand in 2021. This year, the demands go beyond the usual suspects of single-window clearance and industry status,” says Anuj Puri, Chairman, ANAROCK Property Consultants.
For instance, “investors could be attracted towards rental housing, if tax breaks are provided on income from residential property. It will help in greater off take of the unsold inventory. The 80IBA benefit could be extended up to 60 sq mt carpet area for apartment in metro cities too. It will benefit the middle-income group and the developers will get flexibility in designing better homes, which is a need in the COVID era,” says Subhankar Mitra, Managing Director, Advisory Services at Colliers International India.
On the provide side, credit availability desires to be ensured for the beneath-building projects. “SWAMIH has been a good initiative in the previous budget, focusing on the completion of the stalled projects. In the budget, the scope of SWAMIH could be extended for last-mile funding for other affordable housing projects to help them beat the COVID blues,” adds Mitra.
Honeyy Katiyal, Founder of Investors Clinic, says,
“The real estate sector has performed better than many industries even during the pandemic. The government needs to give a little push by offering some more exemptions to the end consumers, who are driving sales for affordable housing. The government can increase the tax deduction under Section 80C of the Income Tax Act for principal repayment on home loans. It should also focus on giving specific incentives to labourers in the real estate construction industry.”
Apart from rising the tax deduction limit beneath Sec 80C for principal repayment on residence loans, one thing desires to be completed for residence loan interest also.
Arun Malhotra, CEO, AM Estate Developers, says, “According to Section 24 of the Income Tax Act, homeowners currently get a rebate of up to Rs 2 lakh on the home loan interest if the owners reside in the property. The real estate sector expects the government to raise this ceiling to Rs 5 lakh to attract more customers. Personal tax relief, either by tax rate reductions or amended tax slabs, is also the need of the hour.”
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The present GST price for properties beneath building is as follows:
# 5% minus the ITC advantage for premium residences (>INR 45 lakhs)
# 1% for very affordable residences (<INR 45 lakhs)
Thus, even if the government introduces a restricted-period GST reduce, it would nonetheless increase the demand for beneath-building properties.
“The capital influx from the buyers would allow the builders to finish their projects faster as well. More incentives for private sector investments in affordable housing are also needed. Even though affordable housing is an important segment, the profit margins remain low and, therefore, a stimulus from the government is direly needed. The real estate sector has been dealing with several liquidity issues ever since the pandemic hit our shores. An urgent liquidity stimulus is needed by the government to prevent the sector from stalling,”
adds Malhotra.
Considering that genuine estate is the second biggest job building sector in the nation, developers are hoping that the government appears at carrying out one thing concrete for the sector, maintaining client sentiments in thoughts.
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“This pandemic has wreaked havoc on the real estate sector. Especially from a commercial real estate perspective, we are looking forward to reforms and incentives that provide encouragement to the manufacturing, start-up sectors, etc, offer interest or capital subsidies on systems and equipment for all players looking to invest in technology, sustainable building and digitization of operations. Furthermore, we hope that the Central and state governments work together and take a look at reducing GST, stamp duty and circle rates,” Anand Shukla, Managing Director, Ocean Infraheights Pvt Ltd.