REALTY : Affordable Housing for All is the Priority of Indian Government Now

High budgetary allocation for infrastructure development always augurs well for the real estate market but Indian government is committed to make the dream of ‘Affordable Housing for Everyone’ come true.

90% of house demand in India constitutes the demand for affordable homes. Indian government is committed to make the dream of ‘Affordable Housing for Everyone’ come true. Union Budget 2016-17 certainly pointed out to this fact with several key announcements, such as:

1. 100% tax deduction has been announced on profits made on real estate projects that make homes up to 30 sq m in size in the four metros of India and up to 60 sq m in size in other Tier II cities. This tax-free facility has only been announced for projects approved between June 2016 and March 2019 that get completed within next three years (ensuring timely delivery to the home buyers).

2. 60% exemption on service tax has also been announced for construction of affordable house up to 60 sq m – under any government scheme.

3. First-time home buyers whose get their loans sanctioned in 2016-17 (worth up to Rs 35 lakh) – for homes that do not cost more than Rs 50 lakh) – will get an additional home loan interest tax deduction of Rs 50,000 per annum. This can bring the much-needed cheer especially to people who intend to buy homes in Tier II and Tier III cities.

4. Dividend Distribution Tax (DDT) from Real Estate Investment Trusts (REITs) has been scrapped. It means that investors of REITs will not have to pay tax on the dividends they earn. This will give a boost to listing of more and more REITs in India – bringing more and more reliability and security to the sector.

Experts also say that the government has been successful in smoothing out small pain points like addressing the harassment by Excise department of builders who manufacture ready-mix concrete on site for self-use. This is going to spur the construction activity and encourage builders to meet the growing demand of affordable housing.

However, there are people who have been disappointed with the fact that the Realty sector has still not got the ‘Industry & Infrastructure’ status like they expected. Some builders are wary that getting approvals and actual construction work takes longer than the deadlines set by the government.

Still, high budgetary allocation for infrastructure development always augurs well for the real estate market. Hence, most of the real estate experts hail it as a good budget for the sector. If you are looking to buy a home contact to SHRI Group