It is expected that Union Budget 2017-18 will be a common man’s budget with no direct benefits for the real estate sector. The industry however expects that the Union Budget will provide indirect benefits in the form of alterations in the taxation structure and focus on promoting its affordable housing scheme.
Housing for all has been a prime focus area for the government and work is being carried out assiduously. Post demonetisation, banks have reduced lending rates and this comes as a positive for the government to achive its housing for all by 2022 by providing special interest rate reductions for EWS and LIG categories. It would be interesting to see if the Government will extend this to other categories as well.
Some areas which the real estate industry would like to see positive steps taken by the Government include relaxation in income tax rates and clarity on GST. Increasing the tax deduction limit along with reduction of stamp duty charges will allow the young working class to invest real estate and would subsequently be a boost to the sector. Announcement of policies for standardization of construction material and for allied industries such as steel and cement, which indirectly affects the cost of housing units, will uplift the real estate industry.
The sector’s long standing demand for accordance of an ‘industry status’ is another area that the Government should address in the upcoming budget. This will enable developers to avail of loans at reasonable rates of interest from banks and other financial institutions. The industry would also welcome the announcement of a single window clearance, which will help remove obstacles and enhance delivery time.
The introduction of the Real Estate Regulatory Act as well as demonetisation last year has been extremely disruptive for the real estate sector. Passing of the long awaited land acquisition bill and easier norms for FDI along with clarity on GST and RERA should be addressed, as these would act as catalysts for the growth of the real estate industry in the long run.
Date: 30th January 2017
Place: Chennai