Industry stakeholders share perspectives on their wish lists with Sheetal Shelar Patil
When the budget is just a weekend away, all the real estate industry stakeholders - be they builders, buyers, bankers or bureaucrats - share expectations and wish lists. Some of the leading analysts have listed out key aspects that could have maximum implications for all.
Shishir Baijal, Chairman and Managing Director, Knight Frank India, points out that presently real estate falls under 18% tax bracket of the Goods and Services Tax (GST) Act with 1/3rd abatement for land. However in major metros, the share of land is more than 50% of the project cost. He shares, “We therefore recommend that the government aligns this with market realities and accordingly increase the abatement for land to 50%.”
Anshul Jain, Country Head & Managing Director, India, Cushman & Wakefield, emphasises, “To revitalize the housing market, first home buyers need to be incentivized. At present, a first homebuyer can claim an additional tax deduction of up to Rs 50,000 per year for a loan amount less than Rs 35 lakh and for a house value less than Rs 50 lakh. This limit of Rs 50 lakh is on the lower side and would exclude a large chunk of homebuyers and such houses will be available only in peripherals of most metros. In the budget, the government should increase house price limit, and the tax exemption limit in accordance to the home loan taken. Additionally, the government should consider increasing the deduction limit of interest paid on home loan from Rs 2 lakh to Rs 3 lakh. This will give a push to homebuyers who are on the fence, and in the long run, clear inventory with developers.”
Shrinivas Rao, CEO-Asia Pacific, Vestian, opines that for the common man, the budget announcements should include a change in tax slabs, more incentives for home loans, principal and interest exemptions, making home insurance mandatory and tax exemption on same. “The real estate sector would ideally look forward to the budget reducing the long -term capital gains holding period for REITs from three years to one year. This would bring the investment opportunity at par with equity investments and would make REITs more palatable to investors,” he feels.
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