Budget Expectation of Real Estate Industry

By Accommodation Times News Services

Mr Surendra Hiranandani, Founder and Managing Director, House of HiranandaniMr. Surendra Hiranandani, Chairman & Managing Director, House of Hiranandani, “The government has taken positive steps with the announcement of smart cities, increase in FDI and “Housing for All-2022” that have boosted the sentiments of both buyers and developers. We are optimistic that the upcoming budget will address key administrative, financial and tax reforms that will spur growth in the future. According to me there are few key points that should be looked into by the government in the Budget like, granting ‘industry status’ to the real estate sector. Getting industry status has been a long pending demand of the real estate sector as developers can avail finances at cheaper rates from financial institutions that will spur economic growth. Provision for additional interest exemption/tax-saving on housing loans. The current tax deduction limit of Rs 2 lakhs is not sufficient considering the inflation rates prevailing today. The government should look at increasing the interest deduction limit to Rs 3 lakhs for new home buyers. Simplification of taxes:  Promote REITs and remove roadblocks such as Dividend Distribution Tax. Additional allocation of funds for infrastructure development will lead to affordable housing. With the government’s ‘House for All by 2022’, it is imperative to allot new land on the outskirts of metropolitan areas in order to promote affordable housing. Incidentally, the government’s target can be met if the government and the developers join in the hip in creating unique urban townships. Meanwhile, the government must allocate an amount exclusively for developing infrastructure and improving connectivity in the peripheral areas of cities, especially the metros.”

David Walker, Sare HomesMr. David Walker, Managing Director, SARE Homes “We are looking forward to the Government’s support towards the real estate sector with tax breaks and additional incentives since this sector has immense potential to boost general economic activity and create thousands of new jobs, given its upstream and downstream linkages. The real estate sector should be accorded the industry status allowing investments and funds at competitive rates to spur economic growth. Discussions around the Real Estate Bill must reach a positive conclusion which will give home buyers the confidence to return to the market and deal with responsible builders.  Furthermore the implementation of GST bill will eliminate multiple levels of taxation and further reform the lengthy approval process that would facilitate speedy project execution. The present limit on the principle and interest amount of home loan repayments for individual buyers should be enhanced too, as this will make it easier for people to purchase their dream homes.”

Mr. Kishore Bhatija, MD Real Estate Devpt, K Raheja CorpMr. Kishore Bhatija, MD, Real Estate Development, K Raheja Corp– The real estate industry is optimistic about the upcoming union budget. The recent past has seen positive steps being taken with the ‘Housing for All – 2022’ and increased FDI announcement. With RBI reducing repo rates, there is a positive boost in buyer sentiment and we are hopeful that the new budget will address some much-needed realty reforms in the administrative, land, legal and financial aspects. Implementation of the much debated, GST has been in the pipeline for a while now and we would like to see a consensus on implementing it, with more unified taxation in place. We also hope that the land bill will be implemented during the Budget session itself. Clarity on the land acquisition policy holds the key to the development of realty and infrastructure sector. We also need REIT to finally kick off and for transactions to begin Realty players have been rightfully asking for an industry status to be accorded to the sector, which will also help in financing  The industry also requires reduced cost of finance for both developers and buyers to make housing more affordable.

Chintan Sheth, Director, Sheth CorpMr. Chintan Sheth, Director, Sheth Corp, “The budget 2016 will be a crucial affair for the realty market. There are huge expectations from the Government which is already making the right moves creating the perfect atmosphere for the industry. Firstly, the Government need to put in place the single window clearance for projects. While the demand for housing in metropolitan cities is only on the rise, and the industry is not able to bridge the gap between demand and supply quick enough as the already lengthy process of construction is further increased by the difficulty in obtaining permissions. Mumbai’s realty market focuses on the mid and the affordable segment of home buyers. The Government can exempt Income tax for affordable homes built for economy weaker sections and low income groups. The reduction of service tax will take off huge load off the shoulders of home buyers as they are already loaded with several other taxes. We have a strong trust in Government that the real estate bill which was the most awaited and discussed shall pass by 2016. This will boost the entire industry and will definitely prove to be a game changer for the market. The impact of this bill will be profitable to both consumers as well as builders as it will bring transparency in the industry and confidence amongst buyers. Also, the Government needs to bring in control and stabilize raw material prices as they have a direct impact on final price of the product.

Rajesh Prajapati - Managing Director - Prajapati Constructions LimitedMr. Rajesh Prajapati, Managing Director- Prajapati Constructions, “We expect a real estate friendly budget.  We want the government to support the real estate sector through funding similar to Infrastructure industry which has the potential of attracting huge foreign direct investment. We hope that the land bill will be approved during the Budget session itself. Clarity on the land acquisition policy is the need of the hour since it forms a key element for the development of realty and infrastructure sectors. The government should remove or, at least reduce the service tax substantially. Similarly, we look forward to Income tax exemption for affordable homes built for EWS and LIG segments, and tax concessions for construction companies to incentivize them to build low cost homes.The sector also hopes for clarity on GST bill which has been long pending.In the upcoming budget, we expect the government to introduce the much discussed and much awaited single window clearance system which will bring transparency in the overall working system. We also hope that the finance minister will cut duties on  building material such as cement and steel to help reduce cost of construction so that the benefits could be passed on to the ultimate home buyers.”

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