Affordable Homes: Biggest Beneficiary of Budget 2020.
Affordable homes have gained the most, when it comes to the Union Budget 2020-21. The Budget that was presented on Saturday by FM, Nirmala Sitharaman, has majorly disappointed the real estate sector but its emphasis on affordable homes has given the industry some hope.
By Varun Singh
Affordable homes is the only sector in the real estate industry that has gained the most from the Union Budget 2020-21.
The marathon budget presented by the finance minister Nirmal Sitharaman on Saturday was watched and heard by the real estate sector with a lot of hope. However, a majority of them returned upset. The sector while had expected tax cuts, deduction on home loan interest, better benefits like infusion of more money in the sector. However, their morale is not completely down because at least the budget focused on one sector of housing extensively.
Affordable homes, has been the biggest marketing tool by the Narendra Modi led government at the centre since its inception in 2014 and has been carried forward after the return in 2019.
The budget has focussed on affordable homes and the developer community, which also very hard to be pleased has given a thumbs up to this particular move.
They feel the move will boost sales in this sector and help revive the demand. Affordable homes doesn’t have a universal definition. But builders in Mumbai have come up with a definition of their own. Smaller compact homes within Rs 1 crore budget is what they normally term as affordable. The price of the homes go down as you move more in the suburbs and extended suburbs, but the compact home concept still remains.
Meanwhile, on the budget presentation and the biggest takeaway for the real estate community, the affordable housing sector has made developers happy and here are some of the comments from them.
Sangeeta Prasad, MD & CEO, Mahindra Lifespace Developers Ltd, says, “A year’s extension on both the additional reduction of ₹1.5 lakhs for interest paid on affordable housing home loans; and the tax holiday provided to developers of affordable homes will boost supply and revive demand in the segment. This segment also stands to gain from the increase in disposable income due to lower personal tax rates on income of up to Rs. 15 lakhs. The allowance of a higher difference between transaction value and stamp duty rates can also stimulate growth.”
Dr Niranjan Hiranandani, President Naredco, says, “Tax benefits extended to both homebuyers and Developers in affordable housing sector will encourage more launches in this segment.”
Mayur Shah, Managing Director, Marathon Group, says, “The announcement on affordable housing augurs well for the industry and customers as well. Home-buyers will be benefitted with the extension of additional deduction up to Rs. 1.5 lakhs for interest paid on loans taken for an affordable house till 31st March, 2021.”
Anuj Khetan, Director, Vijay Khetan Group, says, “The announcement proposed to extend Rs 1.5 lakh benefit on interest paid on affordable housing loans by a year is a move to encourage the developers to invest more in affordable housing. Also, the tax holiday provided on profits earned by developers is a big relief to the sector.”