Compare Listings

Top Expectations of Realtors from Real Estate Budget 2022

Top Expectations of Realtors from Real Estate Budget 2022

The real estate sector registered a strong revival last year, with housing sales in top cities jumping to 90% of the pre-covid levels, wherein newly launched units reached 2019 levels.

Amid uncertainty relating to the Omicron-induced third wave of the Covid-19 pandemic, the sector has huge expectations from the upcoming Budget.

Chairman, Anarock Group, Anuj Puri, said, “The residential sector looks forward to further support beyond the mainstay demands of industry status, easy availability of finance, and GST rates reduction,”

Puri stated that the following decisions, if announced in the upcoming Budget, would help raise demand for residential projects:

Rs 5 lakh Home Loan Deduction Limit

Puri claimed a need to hike the Rs 2 lakh tax rebate on home loan interest rates under Section 24 of the Income Tax Act to at least Rs 5 Lakh. This would infuse robust demand for housing in the affordable and mid-segment categories.

As stated by Kanika Gupta Shori, Founder and COO, Square Yards, “Property stakeholders want the standard Rs 2 lakh tax deduction on interest paid on home loans to be increased to Rs 5 lakhs as it will bring more salaried people in the bracket and help them realize their dream of buying a home. This decision will also keep the housing demand healthy and help property developers recover from the losses and increase their wafer-thin profit margins.”

Home Loan Principal Repayment Deductions Over and Above the Existing 80C

Personal tax relief, out of either deduction in tax rates or revised tax slabs, would be seen as a welcome move – especially after the last increase in the deduction limit under Section 80C (to Rs 1.5 lakh a year) held in 2014.

Puri stated, “The time is certainly ripe for a further upward revision, but there is no denying that the government currently lacks the elbow space for such a move. Instead, it may focus on providing more incentives to MSMEs and SMEs struggling post the pandemic. Also, the government spending on infrastructure may further get a boost.”

Redefining Affordable Housing Criteria

Nowadays, affordable housing can be defined on the basis of the property size, its price, and the home buyer’s income. For instance, an affordable housing unit with a carpet area up to 90 sq. m. in non-metropolitan cities and towns, and 60 sq. m. in metro cities is valued up to Rs 45 lakh for both. The central bank’s definition is based on the loans extended by banks to people for building homes and buying apartments.

As per Puri, the government should consider revising the pricing parameters city-wise to include a broader customer base under the umbrella extended to this segment. “While the size of units as per its definition (60 sq. m. carpet area) is relatively appropriate, prices of units (up to Rs 45 lakh) are not viable across most cities. For instance, a less than Rs 45 lakh budget is far too low for a city like Mumbai. It needs to be increased to at least Rs 85 lakh.”

For other top cities, the budget range should be raised to at least Rs 60-65 Lakh. After this price revision, more homes will be included within the affordable price tag, enabling more buyers to avail multiple benefits like subsidies by the government, lower GST rates at 1% without ITC, and the tax deduction of a total of Rs 3.5 lakh on home loans interest repayment.

Affordable Housing Benefits should be Increased.

According to ANAROCK Research, affordable housing in 2021 constituted approx. 26% of the overall supply across the top 7 cities. Tax exemption for ARHC will help reduce labor shortage challenges if future disruptions occur due to the pandemic.

Puri reminded us that affordable and rental housing received a big push in the last Union Budget, with the period for extra deduction raising Rs 1.5 lakh for loans up to 31st March 2022. Additional extension of this benefit will ensure buoyant demand for affordable housing in 2022.

As per Colliers, a commercial real estate brokerage professional services, the expectations from the upcoming Budget would be to increase focus on formulation of policies to increase consumer spending and investment.

Ramesh Nair, Colliers CEO says, “Budget 2022 should continue to focus on expansionary policy measures to boost consumer spending and investment. Measures to boost affordable and mid-income housing in the form of extension and expansion of tax benefit for first-time home buyers, sops for developers engaged in affordable housing and rental housing projects will have a positive domino effect on the real estate sector and the overall economy,”.

TDS Relief Extended to NRIs

As stated by India Sotheby’s International Realty CEO Amit Goyal, the government should focus on reducing TDS on property transactions for NRIs and offer relief on tax penalties on the difference between agreement value of properties and circle rates.

Goyal further added, “The difference of more than 10% between the circle rates and agreement values of properties translates into tax penalties under Section 43CA of the Income Tax Act. The government must appreciate that the difference between the circle rate and actual price is much higher in certain areas of Delhi and other parts of the country. Hence, the government should consider extending the relief to up to 20% of the difference,”.

“The other pain point is the applicable tax deducted at source (TDS) on property transactions for NRIs. IT is way too high and should be reduced from the current 28.49%, as the refund process still takes significantly longer.”

img

Axiom Landbase

Related posts

  • Blog

Embark on an Epic Journey: Discover M3M Now Wow Offers in Gurgaon with M3M India

A world of limitless opportunities is waiting for the residents to start their investment in the...

Continue reading
by Axiom Landbase
  • Blog

Experience Ultimate Luxury with Smart World T20 Offers – Irresistible Deals Await in Gurgaon!

A home is a haven of security and stability in an ever-changing world. Owning a home Smart World...

Continue reading
by Axiom Landbase
  • Blog

Why is it Auspicious to Buy Property During Navratri

Nights adorned with celebrations, enthusiasm, happiness, and vibrancy within ourselves are a few...

Continue reading
by Axiom Landbase
whiteland-Aspen

ENQUIRE NOW