Budget expectations: Housing for All

To revive its fortunes quickly, the real-estate sector is looking beyond the usual sops — for a magic bullet. The sector’s nearly decade-long request has been to get infrastructure status, which will enable it get lower cost of funds. This will benefit smaller players such as Ashiana Housing and Puravankara.

Among the key policy measures last year, GST has been a bone of contention for the developers. There are multiple issues that the industry has been pointing out, including the fact that Stamp Duty and Registration charges are outside the ambit of GST. Developers want these to be included in GST to reduce the overall cost for the buyer. They also want rates to be lowered.

Another long-standing request has been to implement single window clearances, to speed up approval process and reduce paperwork. This becomes more important as delivery times must be met strictly under RERA.

On the cards
  • Infrastructure status for real estate
  • Stamp Duty and Registration charges to be included under GST
  • Higher allocation for affordable housing

Given the low sales and lack of buyer interest, it is widely believed that home buyers will be given tax incentives. The deduction limit for housing loan may be raised from INR 2 lakh. The tax incentive for first-time home buyers under Section 80EE could be hiked from INR 50,000. This will benefit nearly all residential developers, including Prestige Estates and Sobha.

The affordable housing segment has been a bright patch in the otherwise bleak housing market. To achieve the mission of ‘Housing for all by 2022’, the focus on the affordable housing segment would continue.

The credit-linked interest subsidy scheme under the Pradhan Mantri Awas Yojana (Urban) could get more funds. And given the hassles and delays in affordable housing and infra projects to acquire land, policy measures to enable tapping Government’s land bank are also being mooted. These will benefit players such as Mahindra Lifespaces.

Higher allocation to infrastructure is considered almost a given. A wide range of infrastructure development - irrigation, urban infrastructure, Sagar mala, Bharat mala, inland waterways projects, Smart Cities, roads and railways – are expected to get larger funds. Road developers such as Ashoka Buildcon, waterway developers such as Dredging Corporation of India and irrigation and urban infrastructure developers such as KNR Construction, stand to gain.

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