The Developer Community has a huge wish list, from defining affordability to reduction on interest rates from the Union Budget 2020.
By Varun Singh
The Union Budget shall be presented in February, but developers and developer bodies across the nation have started preparing a wish list for themselves.
They expect that the finance minister Nirmala Sitharaman announces deduction of interest on Home Loans and Housing Loan up to Rs 1 crore may be counted towards Priority Sector and interest rates to be below 7% effectively.
The developers also want uniformity in the definition of Affordable housing, the developers want the following definition to be accepted. Affordable housing comprises units with a carpet area as defined under RERA that do not exceed sixty square metres in the metros and 90 square meters elsewhere.
They are also seeking One Time Restructuring Scheme for Real Estate Projects. Below are the demands they want the FM to consider for them.
Praveen Shetty, Vice President – Marketing, Runwal Group
2019 was an eventful year for the real estate market and there are high expectations from the upcoming budget. However, it needs a more significant push for a robust development as it contributes largely to the country’s GDP. With GST, stamp duty, income tax, and capital gains tax already a burden on homebuyers; an income tax rebate could be provided for new home buyers. The real estate sector has been going through a cash crunch and the current NBFC crisis has worsened it. Therefore the industry hopes, the government will help the sector in raising funds from other sources by relaxing norms. Including ITC benefit in GST for under-construction homes will be a great incentive to reduce property prices and make under-construction homes attractive again. Timely completion of projects has always been a concern, and a single-window clearance will help to swiftly execute projects making it a win-win situation for developers and homebuyers. We hope for a budget that is conducive and propels the growth of the economy, boosts the real estate sector, benefits the homebuyers and provides relief to the developer community.
Manoj Gaur, MD, Gaurs Group and Chairman, Affordable Housing Committee, CREDAI
We are looking at the upcoming Budget with great expectations as it might turn out to be a day when a lot of policy decisions can be announced to smoothen the functioning of the real estate sector. Last one year has already seen many announcements and measures that has already helped in gaining confidence of the buyer. We that the government in this Budget will take a call on single window clearance, which is long pending and is the best solution to expedite the development process. If not single window clearance then the permission granting authorities should be brought under the ambit of RERA. This would make sure that the permissions are granted on time and the developers should not bear the brunt for any delay on the part of authorities. The Budget is expected to be in line with the goal of ‘Housing for All by 2022’. The government should give certain sops to the developers for affordable housing and attention should be paid towards Input Tax Credit (ITC). Builders are seeing drop in profits which will ultimately be transferred and on to the buyers leading to increase in property prices and hence defeating the purpose of providing housing for all.
We wish for re-introduction of input tax credit in GST, which has been withdrawn recently. With the input tax credit benefit, property prices will remain under control. Also bringing stamp duty and registration charges in the ambit of GST will be highly appreciated if the Budget addresses it. We expect this year’s full-budget to increase the income tax exemption limit of the Income Tax Act, 1961 from the current Rs 2.50 lakh to at Rs 5 lakh, which will encourage people to go in for their own residential premises.
Pradeep Aggarwal, Founder & Chairman, Signature Global and Chairman, National Council on Affordable Housing, ASSOCHAM,
Affordable Housing sector has been given the infrastructure status but the implementation has not been up to the mark. We hope that the announcements that were made last year regarding the investment towards infrastructure will get a clear picture for implementation. The Budget should also address the issue of making cheaper land available in main cities for the development of affordable housing. Apart from that income tax benefits are also expected to increase which will help in more investment in real estate, which in turn will help the economy.
We expect the Government to double the amount of fund allocation for Pradhan Mantri Awas Yojana. This will enable more people to realize the dream of owning a home and also help the Government in achieving the goal of Housing for All by 2022. Finance Minister will have to pay attention to the Input Tax Credit as well, otherwise it will be a direct hit on Affordable Housing as the house becomes even more expensive and will be away from the common man’s reach. Apart from this, Government should reduce the GST to single digit on building material like steel, cement etc as well as contractor service among others.
Gaurav Gupta, President, CREDAI Ghaziabad
We are looking forward for the industry status to the real estate sector along with steps being taken in the direction of single window clearance under ease of doing business will tremendously help the sector. Also, it will be a perfect situation if the GST is revised for construction materials such as cement to make them more affordable. First of all, the income tax deduction under section 24 must be increase up to 4 lakh. The second most important aspect is the government should ensure land availability for Affordable Housing and the approvals related to the projects. Many times it’s make difficult for the developers to get them delivered within a stipulated time due to not getting timely approval. Therefore it should be mandatory to have a time-bound approval system in the sector. Apart from this, new technology is being used day by day to speed up the construction. Also, this budget must also aim at increase the present savings limit so that the young population of the country gets a higher spending power and look at real estate sector as an investment avenue.
Mohit Goel, CEO, Omaha Ltd.
The Government has announced several measures like stress fund for stalled projects, linking of home loan rates to an RBI approved external benchmark and additional tax deduction of Rs 1.5 lac to first time home buyers on homes up to Rs 45 lac. The Government also announced upfront recapitalization of PSBs so as to improve the credit flow in the economy. However, due to the downturn in the market amid NBFCs crisis, lack of confidence amongst homebuyers and banks wary of lending, we urge the Hon’ble Finance Minister to announce a one-time loan restructuring for the sector. This will speed up construction and once construction begins in a full swing, not just consumer confidence but also sales and overall economy will see an upswing.
Dhiraj Jain, Director, Mahagun Group
Sector has high hopes from the Budget and it is expected that the FM will take care of the liquidity as well as situation of speedy delivery of projects. This can be done if FM comes with specific plan to provide funds to the real estate sector. Mere announcements might not work as the need is timely implementation of measures to control the situation. A decision regarding Input Tax Credit, cost of raw materials for real estate, availability of cheaper land, etc, will go a long way in addressing the situation at hand.
Dhiraj Bora, Head Corp Comm, Paramount Group
Government is constantly pushing infrastructure development and we hope that the momentum will be maintained in this budget also. The work on smart cities is stuck and the FM should throw some light on it. The budgetary allocation for the development of smart cities should increase as the present allocation is too low for making the smart cities possible.
Ketan Musale, Director, Dotom Realty
The real estate sector is very optimistic about the upcoming budget in 2020 as we hope that it will include provisions to provide immediate relief to all the industry stakeholders. We expect the upcoming budget to hold provisions to restore the faith among the developers by including long-awaited measures like the introduction of a dedicated Single Window Clearance system for speedy clearances and approvals of the projects. For the homebuyers, we expect the budget will include additional income tax deductions for the customers buying housing units under the affordable segment. Indian real estate needs to be made more attractive to foreign investors and the budget is an ideal platform to announce further incentives that will attract more foreign investments into Indian real estate. The realty sector expects support on skill development initiatives, as it requires skilled workers to handle technology and new-age tools. Moreover, the entire real estate sector should immediately be granted industry status to make it eligible to avail finances from banks on lower interest rates. However, we expect this budget will further help in providing the much-needed fillip to the housing segment.
