While home buyers are looking for financial assistance, lower interest rates and protection from delays, developers want a single-window clearance system, easy liquidity and more tax sops.
Though the government made several major announcements in last year’s budget, only a few succeeded in stimulating growth in the realty market. A weak global economic situation has also impacted the Indian realty market. Consequently, the various stakeholders in the realty sector have big hopes from Budget 2016 – they feel that it can make or break the growth of the realty market.
While property buyers are looking for announcements that promise financial assistance, lowering of interest rates on home loans and protection from delays in obtaining possession, developers want an implementation of the single-window clearance system, easy liquidity and increase in tax sops.
Although everybody has some demand from the forthcoming budget, a few measures can actually improve the realty sector and encourage steady growth. Experts believe that Budget 2016 must address the following issues, to live up to the expectations of the realty market:
1. Steps to implement the single-window clearance system
2. Passing and implementing the GST and real estate regulatory bill
3. Infrastructure status to the real estate sector
4. Support for affordable housing
5. Taxation reforms
Affordable Housing for All
To achieve its mission of ‘Housing For All by 2022’, the government should give appropriate income tax rebates and sops, on the purchase of affordable homes, says Dr Anil Kumar Sharma, CMD of the Amrapali Group. “They have to restructure bank loans and provide a single-window approval process for realty projects, to avoid delays. Also, to promote affordable housing, Section 80 IB (10) should be reintroduced in the budget, for the fiscal year 2016-17. Lastly, granting industry status to the housing sector, will help the developers to get bank loans at lower interest rates and pass on the benefits of affordable housing to end-users,” he elaborates.
While the ‘industry status’ continues to elude the sector, analysts and realty experts maintain that it should at least be accorded an ‘infrastructure status’. This will infuse confidence and discipline in the sector and boost the flow of funds as priority sector lending would open up, they point out. It will also help in reducing delivery timelines.
The Land Acquisition Bill
Prajapati also hopes that the land bill will be approved, during the budget session of parliament. “Clarity on the land acquisition policy is the need of the hour, since it forms a key element for the development of the realty and infrastructure sectors. Similarly, we look forward to income tax sops on affordable homes built for the EWS and LIG segments, and tax concessions for construction companies, to encourage them to build low-cost homes,” demands Prajapati.
Stakeholders have also called for a cut on the duties on building materials, such as cement and steel, to help reduce the cost of construction and pass on the benefits of lower cost to homebuyers. The government should remove, or at least reduce the service tax substantially, adds Prajapati, while others are insisting that the government pass and implement the long-pending GST Bill quickly.
Although everybody has expectations from this year’s budget, these few key measures will genuinely benefit the industry and consumers, and encourage growth.