Demonetization in 2016 Badly affected the real estate sector hoping for relief
and expectations from Budget 2017 among all stakeholders in the market. Real estate developers
and other industry experts have long been demanding Infrastructure status for affordable
housing for quite sometime. 2017 Budget which announced on Feb 1st Government gives Infrastructure Status for Affordable housing,
so what this means for housing sector experts say
#1 Government Incentives & Tax benefits
Relaxation on long term capital gains, joint development agreements between developer and seller, tax rebates for
builders on unsold stocks would provide a big relief to the real estate sector,
which is facing a multi-year slowdown, developers and consultants said
#2 Funding from Foreign and Regional Banks
In keeping with ‘Housing for all by 2022’ Government budget announcement for Infrastructure status for affordable housing can push the supply and would provide low interest for the funds sought by the Builders. CREDAI National president said
“We must appreciate the fact that the government is very serious on the mission of housing for all
and in the same light we have seen some extremely positive announcements in the budget today.
Affordable housing getting infrastructure status will enable efficient supply of housing stock
in the country and provide benefits associated with it. Additional refinance of Rs 20,000 crore from National Housing Bank and lower interest rates resulting from increased liquidity in the banking sector would add to the funds for the sector at lower costs to the ultimate consumer. Even institutional funding will be easier now.
#3 Land Procurement for Projects
The government may release land specifically
for affordable housing development in central locations of major urban centres in India feel
industry experts due to providing infrastructure status to affordable housing.
#4 Built-up area to Carpet Area
More developers would now enter into affordable housing projects with the change
in the eligibility norm to carpet area from built up area as well as clarity on
applicability of 30 sq meter and 60 sq meter criteria.
What you think about union budget for real estate sector, suggest your thoughts