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The demand for residential properties, valuing up to INR 45 lakhs, is likely to increase, as a result of the additional tax benefit deduction of INR 1.5 lakhs. However, some of the players have complained that the real estate sector did not get the industry status. Besides, the rued as no separate fund was provided to develop the projects that were stalled. Others have complained about the INR 45 lakh cap on the deduction of tax on home loan interests.
It is expected that the Budget will boost up the real estate sector, according to experts. The demand for housing will also be boosted. However, they also stated that it was needless to impose a cap of INR 45 lakhs when the deduction was made. Some real estate players also expect the government to provide this benefit to all the property buyers, and remove the cap of INR 45 lakhs.
The President of NAREDCO stated that the idea of the government to provide housing at an affordable rate to all will be successful in most of the cities, apart from Mumbai. The reason is that, cost of land is very high in Mumbai. Therefore, the additional INR 1.5 lakh incentive on interest on home loans, that have been borrowed as per the affordable housing policy, will help the real estate industry in India grow further.
In the last few months, liquidity in the real estate sector has been a major concern. In the Budget, the government has also tried to address this aspect. Besides, attempts have been made to reform the old rental laws. Public housing has also received attention from the government, and these are among the immediate policies in the agenda.
However, some of the experts are of the opinion that the Budget has hit some of the targets, but missed most. The home loan tax relief will increase the demand for affordable properties and make the investments more lucrative for the first-time buyers. Besides, many of the real estate players were disappointed that no distinct budget was announced, so that work on the stuck projects could be commenced.
The tax benefit, that involves the deduction of interest, will lead to an increment in sustainability in demand. The first-time property buyers will enjoy these benefits, when the interests are subverted under the (Credit Linked Subsidy Scheme) CLSS. The tenancy law will also become more transparent, which will make it easy for property owners to rent out residential properties. As the real estate industry in India is going through an important phase, it is important for the property owners to have the ease of renting off and purchasing properties. Besides, the tax deduction policy will boost the industry to a significant extent.
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