Union Budget 2020-21 is due on 1st February and the real estate market players are hoping to hear good news for the industry. Since real estate contributes a major chunk to the Indian Economy, the government has been giving a good push to the industry in different ways over the past many years. In this year’s budget too, real estate is feeling quite optimistic.
The main issue that the industry has faced in the last decades is in terms of buyer’s confidence. because of the slowdown and halted projects. To deal with this, the government had recently announced an alternate investment fund of Rs. 25,000 to enable completion of affordable housing and moderate range projects in the country.
Let us understand what the real estate industry expects from Union Budget 2020. But first, we shall dig a little deeper into the current scenario.
The real estate industry is quite hopeful about the results of this budget. They expect that more demand will be created which would release the unsold inventory. More funds need to be channeled into the sector so that halted projects can be resumed which would again create more jobs in the country. Currently, affordable housing projects are doing well in the residential segment and commercial real estate is growing tremendously and the same trend is expected to continue in the coming time.
Although steps are taken in the direction of improving the condition of the Indian property market, there are a few issues that should be dealt with on priority.
As the Finance Minister is preparing her piece to announce the budget this Saturday, the real estate market players have requested the following:
Currently, houses with carpet area of 90 sq.m. in metro cities and 60 sq.m. in non-metro cities with value not more than Rs. 45 Lakh is considered as affordable housing. However, real estate chambers have requested to bring a change in this definition so that more houses can get the affordable home status. They suggest that the value capping of Rs. 45 Lakh should be removed and all homes that fall in the size range should be considered in the category.
Affordable housing has been given the status of infrastructure and hence cheaper loans can be availed by the developers. Widening the extent of affordable housing will make funding easier for them. Also, CREDAI has suggested that the home loans of over Rs. 1 Crore should be considered Priority Sector Loans so that the customers can enjoy better rates. There should also be restructuring of the loans already taken by real estate builders.
Real estate players also expect a cut in the personal income tax rates which will eventually fare better for the real estate industry. With more disposable income in the hands of the customer, the demand will improve. In addition to this, if the capital gains tax laws are relaxed, it will be an icing of the cake. Real estate players are also expecting the return of income tax benefits on second homes which will again boost demand in the industry.
Besides all these, the market also expects that the single-window clearance system proposed in the last budget and before that to be implemented this year. Better land reforms are also something to look forward to.