Industry body National Real Estate Development Council also said the abatement for land from the prevailing 33% under GST should be increased to 50%
Bringing real estate under the ambit of Goods and Services Tax (GST) and incentivizing homebuyers are among some of the recommendations in the Budget wishlist of the real estate sector. At present, the real estate sector does come under the ambit of GST, although under-construction properties are levied 12% GST.
"We recommend that the government bring realty under GST, and also subsume stamp duty charges under GST. Besides Real Estate Regulatory Authority (RERA), this will help in bringing transparency in property transactions," real estate consultant Cushman and Wakefield, said.
Industry body National Real Estate Development Council (NAREDCO) also said the abatement for land from the prevailing 33% under GST should be increased to 50%.
"This will bring the tax rate at the level of around 6% of the property cost," it said. Cushman and Wakefield recommended incentivising homebuyers for revitalizing the housing market.
"A first-time homebuyer can claim additional tax deducation of up to Rs50,000 per year for loan amount of less than Rs35 lakh and house value of up to Rs50 lakh. The Rs50 lakh limit is on the lower side, and would exclude a large chunk of buyers. The government should increase the house price limit, and also the tax exemption limit in accordance with the loan taken," it said.
It also proposed that deduction limit of interest paid on home loan should be hiked from Rs2 lakh to Rs3 lakh. Jaxay Shah, president of industry body Confederation of Real Estate Developers Associations of India (CREDAI), said they expect concession of at least Rs5 lakh per annum in income tax for homebuyers.
"The Budget will be the last test for the Government on its promise of development. Real estate sector has borne the brunt of reforms such as demonetisation, RERA and GST. It's time for a healing touch to the sector inalienably tied to housing for all by 2022," he said.
The Council suggested a flat tax rate of 10% or increasing deduction limit from 30% to 50% to incentivise rental housing construction. It also recommended doing away with the provision to consider notional income from property held by developers as stock in trade.
Cushman and Wakefield also pushed for removal of stamp duty from Real Estate Investment Trusts (REITs), saying the exemption, even if for a few years, it would go a long way in increasing their competitiveness in the country. It also pointed out that while GST was proving to be a catalyst for logistics and warehousing sector, incentives such as income tax benefits and higher FSI (Floor Space Index) under Free Trade and Warehousing Zone (FTWZ) will spur development of warehouses.
REAL ESTATE SECTOR
- Industry body National Real Estate Development Council (NAREDCO) also said the abatement for land from the prevailing 33% under GST should be increased to 50%.
- The Budget will be the last test for the Government on its promise of development. Real estate sector has borne the brunt of reforms such as demonetisation, RERA and GST.
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