Budget augurs well for real estate sector

The Union Budget 2017 augurs well for real estate, affordable housing and the infrastructure segments.

“The government has been accommodative of the concerns of the real estate sector. The relaxation on long-term capital gains, joint development agreements, and tax rebates for builders will help reduce their tax liability,” CBRE India and South East Asia Chairman Anshuman Magazine told DH.

The government has redefined “affordable housing”, which is important in a country like India with varied markets. The affordable housing sector is finally set to get infrastructure status.

“We are glad that the government has recognised this with its announcement that it will count carpet area of 30 sq metres and 60 sq metres for affordable housing, instead of built-up area. The limit of 30 sq metres applies only in municipal cities of four metropolitan cities, and in the rest of the cities, the limit is 60 sq metres, which will increase housing size by 30%. This will encourage developers to build affordable homes,” RICS Global Managing Director (Emerging Business) Sachin Sandhir said.

The decrease in the income tax percentage from 10% to 5%, for individual tax payers upto Rs 5 lakh per annum, is seen as welcome benefit to the middle class. This will increase the disposable income and increase the spending power.

However, Ozone Group CEO Srinivasan Gopalan said, “I was hoping for a single-window clearances for new projects, and a reduction in stamp duties, which would have lent further impetus to the ailing Real Estate sector.” IndiaProperty.com CEO Ganesh Vasudevan said, “The 5% tax exemption for medium enterprises having turnover below Rs 50 crore would give relief to small builders who were worst affected post demonetisation.”

Surendra Hiranandani CMD House of Hiranandani said, “The decision to tax capital gains on Joint Development Agreement upon completion of the project is a significant move. However, more clarity is required to avoid litigation, which is bound to happen given the current ambiguity.” Pratik K Mehta, Managing Director, Unishire, said the Budget overall and indeed a fulfilling Budget for the real estate sector.  On the flip side, he said the sector would have been thrilled if our FM had extended industry status to other housing segments too that would have eased funding avenues and directly impacting the projects progress.

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