Union Budget 2017-18 | Win-win Time For Buyers, Developers
The government can exempt income tax for affordable homes built for economy weaker sections and low income groups. Also the reduction of service tax will take off huge load off the shoulders of home buyers as they are already loaded with several other taxes
With the new government policies that real estate sector has witnessed in last year or so, there has been a significant hope for the growth in residential as well as commercial segments. The significant steps that government has taken in amendment of the policies have given a bloom to real estate industry.
In 2017, the focus of Indian real estate will largely be on affordable housing to give momentum to the ongoing sales in the market.
Recent amendments in the Real Estate Investment Trusts (REITs) have resulted in growth reason being easier access to capital for faster project completion. Largely, those staying in rental accommodation will benefit with affordable housing getting a push from the government from time to time with policy changes.
Developers should focus to complete the existing project, sales will happen as the buyer gets to see development and project reach close to completion stage.
The RERA act will strengthen the association between a buyer and a developer immensely. The act will consist of a registration mandate, and strong penalties will ensure that the home buyers feel secure about their investments and further enhance the residential sales.
It will play a significant role of a supervising authority for any land or home deal that takes place. The above policies initiated by the government will help propel the growth of the organised real estate sector going forward.
This is a win-win situation for developers and home buyers. The home buyers can now bet on reputed developers for their property investments and can feel safe with their investments. The sector was earlier known to be unorganized and this Act will definitely bring in more transparency and professionalism into the sector.
FDI in real estate is expected to provide a significant boost to the sector in terms of greater foreign capital inflows. The government's ambitious projects like 'Housing for All By 2022' and 'Construction of 100 Smart Cities' will now get a boost by the substantial participation by the foreign investors. This is an extremely positive step taken by the government and we are happy that it meets most of the industry demands. We now look forward to seeing FDI flow into the sector, thus creating more job opportunities and revitalizing the growth of the realty sector.
The government should look at offering incentives for developers to construct more commercial spaces as it will help in attracting foreign investments and amplify India as a business power house. Growth of commercial property directly results in demand for residential, retail and hospitality sectors. This bodes well for the entire property market.
The government should try to put in place the single window clearance for building permissions. Faster clearance procedures and quick approvals would largely reduce the handover time and increase customer satisfaction level. These when implemented will propel growth of the sector, the results of which will be seen in the year 2017.
The government can exempt income tax for affordable homes built for economy weaker sections and low income groups. Also the reduction of service tax will take off huge load off the shoulders of home buyers as they are already loaded with several other taxes.
The rate cut by RBI brought a ray of hope amongst the buyers but the banks will also have to pass down the benefit to the homebuyers to encourage the prospective buyers to move a step closer to purchase their dream home. Interest rate is one of the important factors as the equated monthly instalments (EMI) is directly linked to it.
Therefore, if the banks pass on the benefits and the EMIs fall, we feel the demand for the housing should witness momentum as far as buying new properties are concerned.
The Indian real estate sector has backward and forward linkages to approximately 265 ancillary industries. It employs over 50 million people. In India, real estate is the largest employer after agriculture and is slated to grow at 30 per cent over the next decade.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.
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