Budget 2020: The importance of buyer sentiment

By Kamal Khetan

“The primary priority must be to uplift buyer sentiment. While this can be done at multiple levels, increasing the current tax exemption limit on the interest of Rs 1.5 lakh (Rs 3.5 lakh for affordable housing) to Rs 5-6.5 lakh (at least for FY21 and FY22) will lead to a confidence boost for buyers to expedite their decision. The Government must simultaneously provide adequate tax relief to those stuck with incomplete projects, yet paying pre-EMIs regularly without any tax relief.

Another area to boost buyer sentiment is via tax relief on house property income. Tax experts highlight that the standard deduction of 30% has not been revised since early 2000. This must be evaluated, considering the current dull scenario and higher inflation in house maintenance costs.

Even though the proposed plans to improve liquidity to developers and provide last mile funding are major steps towards alleviating the sector, we believe that banks must be prodded to ease lending to real estate projects, perhaps through relaxation of risk weightage norms, albeit temporarily.”

(Kamal Khetan, Chairman and Managing Director, Sunteck Realty Limited)