Builders and homebuyers will have to wait for a ray of hope till the budget

Q: Developers are hoping that real estate sector will be granted infrastructure status to boost affordable housing in this year's Budget.

Abhinandsavalla, Mumbai

28th January 2016

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Replies (5)

Hi folks,
If i am not wrong then i think that our Finance Minister should announce a specific date for the implementation of GST. This major reform will give the industry a very clear taxation structure and induce a major sea change for the logistics architecture, since logistics will be driven by cost and not by a regulatory system.

Niraj Shukla, Gurgaon

10th February 2016

Comment

Hi Niraj,
What is your view on eCommerce? Now-a days, this industry is booking at a fast pace and generating jobs and excellent daily based services to the people at large but at the same time it has some dis-advantages too. There is uncertain on job as merger and acquire leads unemployment.

Krupa Vasavaraj, Bangalore

10th February 2016

@Krupa,
Yes, it is major area of concern to the govt. but different states have varying definitions and laws on eCommerce. A common definition as well as law is needed to govern this sector and help companies operate more efficiently. Such a move will help start-up firm up their investment plans, as well.

Niraj Shukla, Gurgaon

10th February 2016

These are some of my thoughts on the things I want from the budget. Instead of allowing home buyers tax benefits post-possession, the Union Budget should make a provision that allows these from the time they start paying interest on housing loans. This will ease their monetary burden considerably and make increase the velocity of home loan disbursements. The government should increase the tax deduction limit for housing loans, especially for buyers in metropolitan cities. The current limit of Rs 2 lakh is insignificant given the ticket sizes in cities like Mumbai, where most houses are priced at Rs 1 crore and above. The Budget should provide clear and convincing benefits to buyers of green real estate in the country. Although the previous Budget prioritised affordable housing, the upcoming Budget should allocate an amount specifically for building infrastructure and improving connectivity in the peripheral areas of cities, especially the metros.

Priya Desai, Mumbai

28th January 2016

Comment

Despite the announcement last year, there has not been a single REIT listing in India to date. The primary reason is the presence of Dividend Distribution Tax (DDT). While the government has worked towards removing other bottlenecks, DDT has remained a key pending issue. Developers and other asset holders need the government to do away with it in the Budget 2016.

Manali Shah,

28th January 2016

Hi folks,
NAREDCO has requested in a pre-budget memorandum to the government that it should consider increasing the deduction under section 24(b) of IT Act 1961 to Rs 3 lakh from the current level of Rs 2 lakh of interest paid on home loan on a self-occupied house. Priority sector lending needs to be extended for home loans of up to Rs 25 lakh for rural, small and medium cities, Rs 35 lakh for metropolitan cities and Rs 50 lakh for mega cities. Also, income from renting of properties should be taxed at a flat rate of 10%, .

Vinay Sharma, Pune

28th January 2016

Comment

I hope that it will be consider in the coming budget session. Apart from that, instead of allowing homebuyers tax benefits after possession, the Union Budget should make a provision that allows the benefits from the time they start paying interest on housing loans. This will ease their monetary burden considerably and increase the velocity of home loan disbursements.

N.Mathur, Delhi-NCR

28th January 2016

You are right Mriganka,
Discussions on the real estate bill must reach a positive conclusion, which will give homebuyers the confidence to return to the market and deal with responsible builders. Getting infrastructure status has been a long pending demand of the real estate sector and this time too we hope that we will be given infrastructure status so that developers can benefit finances at cheaper rates from financial institutions.

Rakshit, Mumbai

28th January 2016

Comment

It will be Mr Rakshit. Hope for the best from the budget. Infrastructure status to the sector will help achieve the government's vision of Housing for All by 2022. Also, affordable housing loans should be provided for acquiring land.

Mriganka Sharma, Bangalore

28th January 2016

@Mriganka,
The National Real Estate Development Council has demanded creation of Special Residential Zones for affordable housing on the lines of Special Economic Zones where special concessions and incentives can be given along with single window clearances.

Rakshit, Mumbai

28th January 2016

As far as tax reforms are concerned, the Budget should offer financial protection from project delays to home buyers. As of now, on purchase into an under-construction property, buyers can only claim tax benefits of Rs 2 lakh after possession if construction is completed within three years. The benefits reduce to Rs 30000 if the builder delays construction beyond this and they pay higher interest. This will be the first time when first-time home buyers purchasing properties for self-use have to pay additional rent.

Mriganka Sharma, Bangalore

28th January 2016

Hi Abhi,
The Budget session of 2016 will be very critical. Slow demand across major cities indicates that 180000 apartments remain unsold in Delhi NCR followed by Bengaluru with 94000 apartments and Mumbai with 80000. Many homebuyers are paying a heavy price for projects being delayed for one reason or the other. Delay in approvals and a massive debt obligation amounting to Rs 30000 crore in case of top 25 developers has also made the going tough for builders.

N.Mathur, Delhi-NCR

28th January 2016

Comment

Right Mathur Sir,
Most realtors and experts are hoping that the real estate regulatory bill will finally see the light of day this year as more people will get the confidence to buy residential property, something they have been hold over the years. Other expectations include granting infrastructure status to the sector, single window clearance, tax reforms and introduction of special residential zones will be on priority list of the developers as well home buyers.

Mriganka Sharma, Bangalore

28th January 2016