The sector is hopeful of getting the infrastructure status
There are clear signals in the Budget for the real estate sector with a focus continuing on affordable housing and the incentives provided are consumer-focused.
“The only meaningful incentive for the real estate industry, that is, the additional interest deduction of Rs.1 lakh on housing loans up to Rs.25 lakh is a testimony to this intention,’’ said Pranab Datta, Chairman, Knight Frank India, a real estate consultancy.
The affordable housing segment would get a boost as a result and “certainly this segment required such a stimulus to increase the housing stock and bridge the unmet gap,’’ he said.
Lalit Kumar Jain, President, Confederation of Real Estate Developers’ Associations of India (CREDAI), told The Hindu that the Finance Minister had missed an opportunity to address issues such as access to funding and liquidity for the sector. “With the government thrust on providing affordable housing which is short by more than 18 million units, we are also hopeful of getting the infrastructure status for affordable housing projects but hopefully that will come separately.’’
Anuj Puri, Chairman and Country Head, Jones Lang La Salle India, felt that the setting up of the urban housing fund by the National Housing Bank with Rs.2,000 crore allocation would boost demand. “The tax deducted at source (TDS) of 1 per cent to be charged on the transfer of immovable property is an obvious move to curb speculation and bring about improved reporting and accountability in high-value immovable property transaction,’’ Mr. Puri said.
Further, the rate of abatement on homes and flats of above 2,000 sq. ft. or costing Rs.1 crore and above has been reduced from 75 to 70 per cent. “Effectively, this translates into an increase in service tax outflow, which means that luxury housing will now become even more expensive,’’ he said. The realty sector, however, felt that there was no proposal on implementation of the real estate regulator and the Land Acquisition Act.