#Budget2017: 5 Things Investors Want From Jaitley
While speculations about the Prime Minister Narendra Modi-led government's plans to shower huge money on building infrastructure in the upcoming Union Budget 2017-18 are widespread, the sector and its various stakeholders are looking for more than investments. When Finance Minister Arun Jaitley presents his government's Budget on February 1, real estate investors, for example, would like to hear announcements that can help them gain from their investments here. To say the least, past couple of years have been quite rough on them. The recent note ban is also seen as dashing investors' sentiment. Media reports say several players put on hold their investment plans after PM Modi announced the note ban on November 8. At a time like this, the government would need to smoothen some ruffled feathers to make India's real estate attractive for investors.
Here is what real estate investors are expecting from the Union Budget 2017-18:
Clarity on tax regime
With the passage of the Goods and Service Tax (GST) law, the Centre has already ensured real estate transactions are no more subject to in-number of taxing. The GST Council has also set the rates for the new tax regime — ranging from 5 to 28 per cent, with 12 per cent and 18 per cent as standard rates. However, the rate at which real estate transactions will be taxed, are yet to be announced. Investors are expecting from the government to keep the affordable housing under the lowest tax bracket. To fulfil the Modi's government's Housing for All by 2022 target, this would be of supreme importance.
Another tax regime that investors would be looking for a clarity is REITs. Announced in 2016, a much clearer structure would further boost investment.
The investors will also look forward to an ease in capital gain tax, especially for the ones who invest heavily in real estate for greater returns.
Moreover, investors who buy property for rental gains would expect a reduction in tax on rental income thus, giving a boost to rental housing.
Also read: Update: Real Estate Buyers Will Love GST Even If They Have To Pay More
Faster implementation
Delays at various levels are a major reason why India's real estate sector started losing its charm among investors; now, in faster implementation lies the key to regain what is lost. For instance, the government will have to ensure the Real Estate (Regulation and Development) Act, 2016, is fast implemented in letter and spirit. The same is true of the various other policy changes that are aimed at bettering things in India's real estate sector.
Also read: RERA Is Not Just Good For Buyers, It's Great For Developers Too. Here's Why
Better perks
Investors come to a market that offers them the best benefits. Of late, this has not been the case with investors who have put money in India's real estate. From policy to implementation, investors of Indian property are witnessing declining profit margins. This could give birth to a negative investor spirit. By offering investors incentives in the Union Budget, the government will be able to stop that from happening.
Moreover, a possible reduction in stamp duty would further accelerate investment.
Effective dispute resolution
Getting in a dispute is the last things an investor wants, but there is nothing worse than delays in dispute resolution if one has got into a tussle. With the effective implementation of the real estate law, this is likely to end. However, by announcing new measures, this issue could be dealt with more effectively.
Stimulated housing activity
Data on home sales show buyers are staying away from the real estate sector despite the various attempts made by the government and developers to promote housing. This is a major reason investors are finding it hard to sell their projects in India. When he announces new measures that are sure to trigger fresh activity in the sector, Jaitley will be doing much good to real estate investors, too.