Budget 2020 Expectations:
Touted as one of the prominent sectors in the Indian economy, the Realty sector is projected to contribute 13 per cent by 2025. Given that the sector is looking forward to the upcoming budget 2020-21 and expects immediate aid in terms of easing the liquidity crisis, incentivize rental housing, lower home loan interest rates and also rationalize personal and other forms of taxation. While the GST rate on under-construction properties was reduced to 5 per cent in 2019, ITC benefits should be included in GST for under-construction homes. Providing ITC benefits will be a great incentive to lower property prices and thus, make under-construction homes attractive again.
Although GST reduced the complexity of multiple taxes in real estate transactions, however, the stamp duty has not been removed. Reduction in stamp duty would encourage the fence-sitters to turn into actual home buyers, spurring up the demand and consumption. We are also looking forward to the quick implementation of Alternate Investment Fund (AIF). Allotted funds need to be utilized to full potential without delay. Completion of stalled projects will improve home-buyer sentiment and boost demand.
Special status should be granted to HFCs to bring them at par with the banking sector for their sustained viability in the market to invest in the sector. They should be allowed to raise funds so that they can offer incentives in the form of lower interest rate to the borrowers. Rental housing will play a vital role in achieving the PM’s vision of Housing for All by 2022.