Pre Budget expectations of Real Estate sector

Mr.Amit Modi, Director, ABA Corp and Vice President CREDAI Western UP, says, “To give boost to the housing demand, the upcoming union budget has to be people friendly budget and the government has to implement Finance Minister’s vision of reducing the taxes for the middle class. Hence we are hoping that the forthcoming Union budget 2017 will bring major announcements in terms of improving investment and taxation climate in real estate sector. We are looking forward for the following reforms from the budget 2017.
1. Industry Status to Real Estate Sector: Delay in according an ‘industry status’ to the real estate, does not make it easy for the sector to avail of legitimate finances from Banks and other financial institutions. Imagine if clean low cost loans could be obtained from the system, then the cost benefit vis-a-vis high interest loans from outside the system can be passed on to the consumer.
2. Infrastructure Status to Housing Sector: We would also like to reiterate our demand for “infrastructure status” to the Housing sector, it has been a long standing ask from real estate developers across the country, since by adding a clause to the definition of “infrastructure facility” to u/s 80IA of IT Act 1961
3. Exemption limit on Interest on Home loan: On the personal taxation front the government should raise tax deduction limit for housing loans up to 5 Lakh from present limit of 2 Lakh per annum, a Rs 2 lakh limit may seem fine for a Rs 20 lakh house, but for Tier 1 cities where housing starts from a minimum Rs 50 lakh house, there present exemption is negligent. A similar limit should also be set for principal loan repayment from Rs 1 lakh at present, which would have had a positive impact on encouraging purchase of homes, especially by the millions and millions of first time buyers across the nation.
In addition, after the demonetization, banks are now flushed with cash hence the government should ask the banks to reduce their interest rates in near future, thereby bringing down the EMI for home buyers and improving their eligibility further attracting millions of first time buyers across the country. Therefore, if the banks pass on the benefits and the EMIs fall, we feel the demand for the housing will witness momentum as far as buying new properties are concerned.”