Budget 2018: Expectations of real estate sector

Budget 2018: Expectations of real estate sector

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In the year 2017, real estate sector went on a 360 degree change. With implementation of demonetization, RERA and GST the sector saw many ups and downs. Now as the Union Budget 2018, to be presented by Finance Minister Arun Jaitley on February 1, the real estate sector is keeping its fingers crossed for revival of fortunes.

According to real estate experts, sales are likely to improve going ahead as consumer confidence improves because of RERA. For further improvements, they want the Government to make some major announcements in coming budget.

Here are some of the expectations of the real estate sector from the Budget 2018:

Single window clearance: Right now the most important requirement of real estate sector is a single window clearance mechanism with minimum human interface.  In order to bring down the project delivery time, accurate deadlines for approvals is very much required. At present, due to many levels of permissions and approvals, it takes around 18 to 36 months to get clearance of any project but with this mechanism, both developers as well as end consumers could get benefit.

Reduction in GST rates: Currently, under-construction properties are charged a GST of 12%, which is considerably higher than rest of the taxes. So, the sector wants that the government should work upon to make GST a tax-neutral proposition.

Industry Status: This has been a long pending demand of real estate players that the sector must be allotted an ‘Industry status’. Due to non-allotment of such status it becomes difficult for the real estate sector to avail valid finances from banks and other financial institutions.   As per many experts, industry status to the sector can help it in getting low-cost loans which will finally benefit buyers.

Increase in limit on interest on home loan:  Buying home in still a very tedious task in India especially for a first time buyers. Applying for a home loan sometimes becomes a painful procedure for people. So the need of the hour is that the government should increase the limit of tax deduction for housing loans up to Rs 5 lakh from the present limit of Rs 2 lakh per annum Apart from this, a similar limit should also be set for principal loan repayment which is Rs 1.50 lakh at present.

Incentives for green buildings: Seeing India’s current urban environment, this requirement is must for real estate market. Due to, marginally higher cost of construction of green buildings majority of developers has kept themselves away from such projects. So, it’s important that the Government should encourage developers to adopt green building technologies with higher incentives in terms of tax exemption.