#Budget2017: Top 5 Wishes On A Real Estate Developer's Mind
Since last few months, the Centre has been active in terms of providing relief to the realty sector, its stakeholders and homebuyers. Passage of RERA and GST last year, the recently concluded 50 days of demonetisation, interest subvention scheme announced by Prime Minister Narendra Modi and the relief provided by several banks through lending rate cuts on 01 January, 2017 has provided much needed fuel to the realty sector.
Though, there are mixed reactions from the realty sector who believe that a balanced budget might be announced, where there will not be many benefits for the real estate sector; but indirect announcements such as exemptions in tax slabs might help the consumers to increase their purchasing power and thus, maintain the flow of money in the economy, along with the expectation of receiving a long awaited industry status are among the wishlist from country's reputed developers.
Relaxation in income tax
Those looking to invest in their first homes, specifically the country's middle class and young generation should be able to find tax slabs convenient to take such a decision. Can such home buyers look at additional tax incentives over the next five years? Industry insiders are also looking at favourable policy announcements for those looking at mid-segment options in Tier- I cities. Let's look at what the developers are expecting.
Avneesh Sood, Director, Eros Group
This time we are predicting, while presenting the Union Budget, finance minister Arun Jaitely should provide some ease in the taxation slabs and provide higher spending power to the consumers that will indirectly benefit the economy and the real estate sector.
Amit Modi, Director, ABA Corp and Vice President CREDAI Western UP
To boost to housing demand, the upcoming Union Budget must be people friendly budget and the government has to implement Jaitley's vision of reducing the taxes for the mid-section of the society. Hence, we are hoping that the Union budget 2017-18 will bring major announcements in terms of improving investment and taxation climate in real estate sector.
Pradeep Aggarwal, Chairman, Signature Global
Making changes in the income tax slabs will allow higher savings and better spending capacity for the common people, thus allowing them to look at real estate as lucrative way for residing and at the same time for investment purpose too.
Dhiraj Jain, Director, Mahagun Group
Tax deduction limit for housing loans of Rs 2 lakh is quite less especially for major Tier 1 cities where ticket sizes cross Rs 1 crore in several cases. This limit can be looked upon along with a reduction in stamp duty charges to allow higher savings. Finally, changes in the tax slabs are pretty much on the cards that will allow the young working class to look up to real estate as an avenue for investment or even residing.
Deepak Kapoor, President, CREDAI western UP
A lot many aspects have to be look into when it comes to real estate sector. Government has to realize that the sector is catering to one of the most important aspects of people, i.e. housing. We all know that we are far behind the target of delivering affordable houses by 2022 where the target of delivering around 30 lakh houses per year is being missed by miles every year. To make the sector achieve the target and deliver homes the government must come up with slew of measures that can assist the developers help government realise this dream. It all means that the government must work on tax assumptions, single window clearance, rental housing, right tax slab of GST for real estate sector and industry status for the sector.
Clarity on industry status
With RERA, ensuring speedy settlement of disputes and methodical growth of the real estate sector, getting the industry status will further fuel up the development with the small-town brokers and developers becoming more professional and working properly.
Pratik K Mehta, Managing Director, Unishire
Being accepted as an industry can advance the accessibility of better financing options for the sector that at present is forced to avail funds through NBFCs at much higher interest rates. Hence, we definitely look forward to receiving an industry status in this year's Union Budget.
Dhiraj Jain, Director, Mahagun Group
Industry status has been a long pending requisite for the real estate sector and there can be multiple reasons attributed to it. The first of them becomes unorganised nature of the country's real estate which needs to be organised and brought under one central agency.
Deepak Kapoor, President CREDAI-Western U.P. & Director, Gulshan Homz
Although RERA will solve this purpose greatly, there still will be gaps to fill and this can be done only if we get an industry status. It would be a game changer for the sector if it is granted this time.
Ashwani Prakash, Executive Director, Paramount Group
Industry status is an urgent need of this sector in order to provide the much-needed impetus on a larger scale in the housing sector to win back the buyer's confidence.
GST's proper implementation
Clarity on GST is one of the subjects that needs to be highlighted in this year's Union Budget. At present, we can only predict the bill's impact on the real estate sector. However, it will be significant to understand what the actual rate of GST would be, as, if the rate is advanced than the current cumulative taxes, it will surely be a spoilsport. This will not only increase the final cost for buying an under-construction flat but also defeat the purpose of the bill. In last year's Union Budget, some tax incentives were announced with an aim of incentivising developers to create affordable housing. Similar kind of benefits may continue to be given for the real estate sector under the GST regime.
Pratik K. Mehta, Managing Director, Unishire
GST's proper implementation is long awaited and we look forward to Union Budget 2017-18 that this uncertainty will come to an end. Being come under the real estate sector, we hope for a fall in the interest rate bracket of 12 per cent.
Vikas Bhasin, MD, Saya Group
We are hopeful that this year's Union Budget 2017-18 will provide clarity over the GST. The simplicity of GST will further make a route for better-working deals between consumer and developer.
Akshay Taneja, MD, TDI Infratech Ltd
Clarity of GST as to which tax rate will be applied to the real estate sector is awaited. This will define the way real estate sector will move this financial year. Another important step would be to increase the tax deduction limit for housing loans especially for the buyers in metro cities. If the government can take care of these two things in this budget then the sector will definitely witness a boost in sales. This we can say from the latest step where banks have already slashed home loan interest rate.
Prashant Tiwari, Chairman, Prateek Group
Initiatives like Smart Cities, RERA and GST are going to help the real estate sector. However, we are waiting for clarity in initiatives such as GST that would help the sector realise its potential. It would be good if the sector can be granted an industry, the demand that has been pending for quite some time now. Once the industry status is accorded to real estate then it would become easier to make the dream of affordable housing for all a reality. As of now, the affordable housing target is far behind and it can only become achievable if the sector gets industry status which would pave way for cheaper financial options for real estate developers.
Clarity over Pradhan Mantri Yojana (PMAY) beneficiaries
The recent announcement by Prime Minister Narendra Modi of three per cent interest rates would be applicable on loans of up to Rs 12 lakh and four per cent on loans of up to Rs 9 lakh, under PMAY. However, both developers and buyers are looking forward to the finer details.
Deepak Kapoor, President CREDAI-Western U.P. & Director, Gulshan Homz
'Housing for All' and affordable housing have been the two major jargons of the government for the real estate sector, where work has been carried out diligently. It is time now to expand these concepts and increase the benefits for other segments of the population as well. At present, only the EWS and LIG segments have access to the PMAY benefits, and still there is a large segment of youth population which is in dire need of an abode at low cost, and they don't fall under such categories. This Budget must focus upon providing such benefit to the masses and provide clarity over projects been covered under this scheme.
Anil Sachidanand, MD & CEO, Aspire Home Finance Corp Ltd (AHFCL) - a subsidiary of Motilal Oswal Financial Services Ltd.
We are expecting in the coming Union Budget 2017-18, the loan amount for concession announced by the government under PMAY rural be further increased from Rs 2 lakh to Rs 5 lakh so that majority of the residential housing sector in rural areas gets covered.
Tax clarity on REITs
The development of an Indian REIT market will certainly accelerate the country's modernisation and benefit the citizen of India. This year's Union Budget might bring more clarity in this segment.
Rattan Hawelia, Founder & Chairman, Hawelia Group
Government should work on the tax clarity on REITs, making it a viable tax structure and thus enabling the investment options. All such policy reforms will give momentum to the struggling real estate sector and 2017 can be the year of noteworthy progress in real estate.
Vikas Bhasin, MD, Saya Group
Along with GST's proper implementation and relief on income tax, one more important thing anticipated from the Union Budget 2017-18 is that incentives for digital means of transacting and promoting REITs and Infrastructure Investment Trusts (InvITs) . This might be the highlight from the upcoming Budget. The tax clarity in Real Estate Investment Trusts (REITs) and InvITs will make these segments operate correctly. Better implementation will provide more investment options for consumers.