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The Union budget brings an opportunity to tweak the way the Indian economy is proceeding in the right direction. Well, it is interesting to note the Union Budget 2018 effect on Real Estate Sector, with a number of policies and regulatory mechanisms integrated by the government in recent months. The government has taken a number of steps to bolster the real estate sector in India. Starting from 2016, economic policies like demonetization, GST, and RERA have been effective in bringing about more transparency in the real estate sector in India. Here are six ways in which the real estate sector in India will benefit from the Union Budget:
Single window clearance
In the post-RERA period, the developers need to facilitate the smooth clearance of the projects. This eliminates the execution delays and other hindrances that come across the way. An important benefit for home buyer from Budget 2018 is that they will be able to seek the single-window clearance mechanism.
The real estate sector gets an industrial status
The real estate sector in India will get an industrial status from the Union Budget 2018. The real estate sector contributes to the GDP, besides being the fourth-largest generator of employment in India. The budget 2018 is likely to leverage the India real estate property business in this sector.
Rationalization of tax on REITs
The rationalization of tax on REIT will also benefit the real estate sector in the country. Till now, this is yet to be listed, but when the tax norms for REITs are simplified, it will strengthen the real estate sector. It will lead to more participation in the sector, and investors will be more inclined to investing in the real estate sector.
Income tax benefits
The first time home buyer benefit is another important area to look into. These buyers will get better income tax benefits. At present, a first time homeowner can claim a tax deduction up to INR 50,000 in a financial year, which will be further increased.
Reduction of GST rates
Presently, a GST rate of 12% has been imposed on properties that are under construction. The government should try to make it a tax-neutral proposition, which will help the real estate sector to revive. With other government policies coming into place, the real estate sector will have more transparency and clarity in tax credit. This is likely to result in a rationalisation of tax.
Green buildings to get incentives
Incentives for green buildings are likely to leverage the real estate sector again. The urban environment is fast developing in India. However, the construction of these buildings involves a higher cost. Incentives in this sector will increase the investment in green buildings
Evidently, the Budget 2018 is likely to strengthen the Indian Real Estate Sector in a big way.
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