Realty firms want a house full of incentives from Budget

The real estate industry has high hopes from the Union Budget with major players looking for a plethora of sops.

"Real estate industry is in for a big upswing and this Budget is going to be a legendary one," said Vikas Oberoi, chairman and managing director, Oberoi Realty.

Industry players are expecting incentives to affordable housing and reduction in interest rates.

Niranjan Hiranandani, chairman and managing director, Hiranandani Group, said, "I think the interest reduction for home loans will happen, hopefully. Second, there should be something to give incentive for affordable housing because with the land, construction costs, ready reckoner rates going up and other taxes going up, overall, some incentivisation to make affordable housing would be a necessity."

Oberoi, on the other hand, calls for 100% deduction for interest paid towards purchasing an apartment. "The entire interest that is paid towards purchasing an apartment up to may be, say Rs 12 lakh per annum should be deducted from tax."

"If GST is brought in, they should make sure all costs, including stamp duty, should not be more than X or Y or Z, as at the end of the day because of GST the tax compliance would go up. There are a lot of developers who buy in cash, sell in cash, but with demonetization all that will go. Their revenues would go up and that benefit they should give to buyers in the form of some reduction. Today, the buyer is paying anywhere between 30% and more only towards all these taxes and all that put together," said Oberoi.

Rajeev Talwar, CEO of DLF, said the Budget should empower the buyers by making the repayment of loans to a higher amount.

Kamal Khetan, chairman of Sunteck Realty, concurred.

"We are looking at an increase in taxation benefit for housing loans from Rs 2 lakh. HRA is also negligible. Rs 2 lakh limit is nothing, especially for a city like Mumbai. So, if they increase the house rent allowance, that may help a lot," he said.

Brotin Banerjee, MD & CEO at Tata Housing Development Co, sought raising slabs for interest rate subvention to benefit urban centres.

"The slabs for affordable housing for which subvention scheme is allowed need to be re-looked at. The amount needs to be at least doubled, especially in the semi-urban areas where a lot of migration from the hinterland is happening. Otherwise, rural housing will get a boost but in semi-urban and urban centres, Tier 2 cities, bigger cities, the housing will not become more affordable. If the Budget can address that, that will be good. The interest rate subvention for the first-time buyers should be doubled," said Banerjee.

The industry also expects some financial support.

Talwar of DLF said, "We should set up a fund for stressed assets to kick-start the sector. Lower interest rates are not only for buyers, these are also for builders who take loans. A moratorium on repayment on loans; let them pay interest during these three years also, but for three years, do not worry about the principal."

Banerjee said, "The Budget should ensure that bank loans are more forthcoming for affordable housing players to purchase, acquire projects."

Last year was landmark for the sector which saw the passage of the Real Estate Regulator Act (Rera) and demonetization. But overall, the industry remains positive.

"The industry has gone through a lot last year. Demonetization, Rera will help only in long run but the short-term pain is there. The government should boost the economy and real estate sector. These are the minimum things one can do," said Khetan of Sunteck Realty.