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Feel good: Most sops for property buyers have been left untouched in the Union Budget.

The income tax sops on home loans are intact which means property owners can continue to enjoy the benefits on the interest and principal paid on their home loans. While those who have already invested in a property can sit back and feel good about th eir investment, it is still not party time for those looking to invest in property. The budget has a few things for them to worry about.

To start with, the decision to impose higher excise duty on cement bags, priced more than Rs.190, will push up the cement cost in general.

As cement manufacturers have already indicated, the higher excise duty will result in prices going up which will have to be borne by the end consumer. This in turn means higher input costs for property as cement accounts for a good chunk of the property price. This comes at a time when property acquisition in general has gone up for home buyers, thanks to higher interest on home loans.

As Sushil Mantri, chairman of Mantri Group puts it, the cost of real estate for everybody will increase because of higher cement prices. In fact, Mr Mantri has drubbed the budget dry.

To some extent, the negative news was not totally unexpected as the property sector in general, was bracing for some negative measures with the government stepping up its focus on curbing inflation.

While the upward movement in interest rate has to some extent, curbed the rise in property prices, the market was apprehensive about capital gains tax. Prior to the budget, there were rumours that government was bracing for a higher rate of capital gains tax. To the relief of many property investors, the budget is silent on capital gains, which means there is no fresh increase to the existing rates. Also, the Finance Minister has announced to continue with capital gains bonds in the next financial year. As you are aware, financial agencies like REC (Rural Electrification Company), National Highways Authorities of India, issue capital gains bonds which allow investors to enjoy tax benefits from gains made from the sale of property.

Besides enjoying the IT benefits on home loans, the property owners can also think about earning from their property without actually renting it out or selling.

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