Real Estate's High Expectation from the Union Budget 2019-20
Author(s): City Air NewsReal estate sector, which is in the revival mode after the slew of measures taken in the last term to increase the transparency, has high hopes from the Budget 2019-20. The list of expectations is long and includes...
Real estate sector, which is in the revival mode after the slew of measures taken in the last term to increase the transparency, has high hopes from the Budget 2019-20. The list of expectations is long and includes demand for more fund allocation for PMAY to reduction of GST on building material. The sector is also worried about the transfer of benefits of lower repo rates to be given to consumers as it will increase the sales. Most of the developers focus on benefits to the probable consumers such as more tax sops and rate which will transfer into more home sales.
The sector feels that the Budget would be in line with the long term goal of 'Housing for All by 2022'. To make sure that more affordable housing should come up according to the demand, the government has to give certain sops to the developers also and attention towards Input Tax Credit would be a welcome step. So let us listen from the people of the sector who will be responsible to deliver the dream homes to the general masses.
Pradeep Aggarwal, Co-Founder & Chairman, Signature Global and Chairman - ASSOCHAM National Council on Real Estate, Housing and Urban Development
In the union budget 2019-20, we expect the Government to double the amount of fund allocation for Pradhan Mantri Awas Yojana. This will enable more people to realize the dream of owning a home and also help the Government in achieving the goal of Housing for All by 2022. Finance Minister will have to pay attention to the Input Tax Credit as well, otherwise it will be a direct hit on Affordable Housing as the house becomes even more expensive and will be away from the common man's reach. Apart from this, Government should reduce the GST to single digit on building material like steel, cement etc as well as contractor service among others.
Manoj Gaur, MD, Gaurs Group & Chairman, Affordable Housing Committee, CREDAI
The real estate’s inclusion in GST has allowed the developers to pass on the benefits of the ITC to the buyers. We wish for re-introduction of input tax credit in GST, which has been withdrawn recently. With the input tax credit benefit, property prices will remain under control. Also bringing stamp duty and registration charges in the ambit of GST will be highly appreciated if the Budget addresses it. We expect this year’s full-budget to increase the income tax exemption limit of the Income Tax Act, 1961 from the current Rs 2.50 lakh to at Rs 5 lakh, which will encourage people to go in for their own residential premises.
Amit Modi, Director, ABA Corp & President (Elect), CREDAI Western UP
The real estate sector in India entered a revitalisation mode during 2018 where the teething problems posed by various regulatory reforms such as RERA and GST have started settling in and has started to weed out inefficiencies from the sector leading to an era of transparency and accountability. As the industry is coming to terms with these unprecedented reforms, it will be compelling to see how a strong and stable government will reflect on fueling the growth of the industry through the forthcoming Budget
Single Window Clearance: At present the multiplicity of permissions and approvals that developers are required to secure and the lack of single window clearance, it could take anywhere from 18 months to 36 months before beginning any project. Single window clearances as envisaged won’t just cut down the project delay but significantly impact the construction costs.
Exemption limit on Interest on Home loan: To support millions of first time buyers across the nation, the government should increase the limit of tax deduction for housing loans up to 5 Lakh from present limit of Rs 2 Lakh per annum. A similar limit should also be set for principal loan repayment from Rs 1 Lakh at present.
Industry Status to Real Estate Sector: Allotment of “industry status” to real estate sector has been a long standing demand of the real estate players. Not having an ‘industry status’ becomes difficult for real estate sector to avail legitimate finances from Banks and other financial institutions. Industry status can help in getting low cost loans from the system, and then the cost benefit with regard to high interest loans from outside the system can be further moved on to the consumers
Dhruv Agarwala, Group CEO, Housing.com/Makaam.com/PropTiger.com
“There's no denying that the finance minister will have to balance fiscal prudence and the urgent needs of the real estate sector, in this budget. The RBI has lowered interest rates three times in a row, bringing rates at record low levels but the issue of transmission of rate cuts by RBI, to the home buyers, also needs attention. We can expect the government's intervention to resolve the NBFC crisis that has aggravated the sector's liquidity constraints. We can also expect the government to step in to increase bank funding to the sector to help projects stuck owing to the liquidity concerns. The regular demands like industry status to the real estate sector, greater tax sops for home buyers and better clarity on GST rates also need to be addressed.”
Dhiraj Jain, Director, Mahagun Group
The Union Budget 2019-20 holds immense significance as it will be the first budget to be presented by MODI 2.0. Being one of the core sectors of the economy, real estate sector is still awaiting to be granted an industry status. Section 80EE provides a deduction of Rs. 50,000 for the first time home buyers if the property is not above Rs. 50 lakhs, irrespective of the size or location. We expect this year’s Budget to increase this tax limit or increase the limit of property value so that savings on taxation gets increased and real estate sector becomes an important investment option for buyers.
Uddhav Poddar, Director & CEO Bhumika Group
In the full-year budget we expect the government to focus on infrastructure development of tier 2 and 3 cities and make these cities ready for next round of urbanisation. We also expect the long awaited industry status to the real estate industry along with a dedicated fund to finance real estate projects as construction is the single employment generator. We expect that Stamp Duty should be subsumed into GST to inventivize home buyers and the overall property market sentiments. Lastly the government must intervene and resolve the NBFC and banking crisis, which is affecting the real estate industry adversely.
Nakul Mathur, MD, Avanta India
We hope that the Ministry of Finance will help the co-working space to flourish. The concept is at nascent stage and require government intervention to become a rage. It is profitable not only for the stakeholders involved but for the small businessmen too. The best part is that it goes in line with the Government's Startup India concept as almost all the start-ups look for co-working to save extra cost. We hope that Finance Minister will do something to help this segment of real estate.
Ashish Bhutani, CEO, Bhutani Group
In the union budget 2019-20, we expect the Govt to do some positive developments for the sector. As the economy needs urgent stimulus and revival of the real estate sector. A vital reduction in interest rates will spur a drastic improvement in the existing liquidity crisis and will ensure the money flow in banks and NBFC's. Also a clear road map for regulations is needed and further corrective measures should be taken to rationalize the GST.
Rajesh Goyal, MD, RG Group and Vice President, CREDAI NCR
We would expect from Finance Minister to bring into incorporation the stamp duty in the real estate sector within the range of GST. The various subsidies provided under the government policies have been of great assistance in healing the realty market, but still some factors including the Single Window Clearance and the status of Industry to the real Estate sector needs heed to make a significant and positive change for the market.
Gaurav Gupta, Director, SG Estates & President, CREDAI Ghaziabad
There is an urgent need for the government to support developers. In order to stimulate growth of realty sector, some tax incentive should be given to buyers. Also with several rounds of interest rate reduction, it is imperative for the government to ensure its effective transmission. Besides government should also create a single window system to expedite various approvals, which will ensure timely deliveries to end users.
Pankaj Jain, Managing Director, Realistic Realtors
To improve investment and taxation climate in real estate sector, we hope that upcoming Union budget 2019 – 2020 should bring major announcements. Below are the reforms which we are expecting from the budget.
Real Estate Sector also needs to accolade with Infrastructure status, it has been a long standing ask from real estate developers across the country.
To increase the efficiency and timeliness of the project, single window clearance mechanism is the need of the hour. At present the multiplicity of permissions and approvals that developers are required to secure and the lack of single window clearance, it could take anywhere from 12 months to 18 months before beginning any project which impacts the cost and delivery timelines of the projects and eventually impacts the end-user.
Bank and NBFC liquidity crunch matter also needs immediate attention and reforms to improve the sector and housing delivery in time. Forum For People's Collective Efforts (FPCE), recently demanded that home buyers should be categorised as primary secured creditors which is a very important point and it should also be looked into if possible to safeguard the interest of people’s hard-earned money.
Ashok Gupta, CMD, Ajnara India
The housing sector is a key indicator of the country's economic growth not only is it a form of easy investment but also aids employment in the country. There is an urgent need for the government to support developers. We are looking forward for the industry status to the real estate sector along with steps being taken in the direction of single window clearance under ease of doing business will tremendously help the sector.
Prateek Mittal, Executive Director, Sushma Group
After witnessing reforms in the sector which were aimed at bringing transparency and increasing the faith of the buyers, we hope that the government will work with the same zeal. We hope that long pending demands are also met this time including the industry status to the sector, single window clearance, and rethinking on input tax credit in GST. We also hope that there will be some relaxation in tax on income which will help people save some money that can be utilised by them to fulfill their dream of buying a house. One of the most important things expected in the Budget is the ways to cut down the EMI burden of the buyers. Till now RBI has done three repo rate cuts, in which banks were not able to transfer benefits to the buyers. The government should come up with some policy or sop that can help the buyers get that benefit. If all these things or even some of these things take place during this Budget the sector will roll one more time with the view to fulfill the housing dream of millions of Indians.
Vikas Bhasin, CMD, SAYA Homes
The Finance Minister will hopefully look into getting industry status to whole real estate sector. It has been a long pending wish of the developers that will help in gaining access to finance at a much lowered cost, thereby making the sector more affordable.. We are also expecting the CLSS budgetary support for both Economically Weaker Section (EWS)/Lower Income Group (LIG) as well as Middle Income Group (MIG) should be doubled so that more home aspirants can purchase their dwelling units.
Deepak Kapoor, Director, Gulshan Homz
Rationalization of taxes would be the one most important factor that the real estate sector would expect from the upcoming interim budget. There should be an increase in the volume of rebate or comfort, which one receives while taking individual housing loan. With union budget, we are looking forward to bring the abolishment of TDS into the consideration which is deducted for the transfer of movable properties and is a very tedious process. We welcome all the measurement by the government in order to increase the flow of money into the sector because real estate provides employment to a large section of the population. If liquidity comes into the real estate sector then it would be an improvement for entire economy of the country.
Kushagr Ansal, President CREDAI Haryana & Director, Ansal Housing
Real estate sector is also adopting and modernizing itself day by day by implementing noble concepts like Green building. Budget 2019-20 must address about providing special incentives to the developers and projects which are offering eco-friendly concepts. This will greatly promote green building concept amongst the developers and help environment as well. It is time that real estate gets industry status. This will enable developers to raise funds at lower rates and reduce their cost of capital, which would eventually have a bearing on overall project cost. Also, this budget must also aim at increase the present savings limit so that the young population of the country gets a higher spending power and look at real estate sector as an investment avenue.
Harinder Singh Hora, MD, Reach Group
It’s a long standing demand of real estate sector that it should be accorded Industry Status as it will lower the overall cost of funds for the industry, which would benefit both investors and end users, it is expected the government should maintain the fiscal prudence as it will help reduce interest rates and give a boost to the economy, it’s imperative that government should bring more clarity towards input adjustment in GST. After government came up with a slew of measures to stabilise the real estate sector, it is important that more recognition should be given to real estate as a sector.
Right now the sector is going through a phase where many buyers are in a wait and watch mode. To smoothen the path, the government must come up with tax sops and rate cuts that are extended to buyers. So far we have seen the RBI announced three repo rate cuts this year but the benefit has not been extended to the buyers. It is paramount that banks should pass-on the interest rates to consumers to get the sector back on a fast track.
Mr. Anupam Gupta, Sales and Marketing Director, GBP Group
The government took some major steps for uplifting the real estate sector in the interim budget and in this budget also we expect the government to undertake favourable steps to aid the developers as well as homebuyers. We expect the government to take steps to curb the existing liquidity crunch and to reduce the interest rates to ensure the flow of money in the banks and NBFC's. Also, we expect the government to simplify the cumbersome process of approval by availing a single window clearance.
Vaibhav Jain, CMD, Rise Group
In last few years RERA & GST supported real estate sector a lot. If the government approves the Industry status for real estate then the Credit availability, specifically from banks, for the sector will get a boost once sums of money are made available by the government through the general budget every year. If the banks re-start funding developers to buy land for development of affordable housing projects, it will be a great boost for the sector, and for Prime Minister's HFA-2022 affordable housing policy. One of the sectors long due demand for single-window clearance is still to be implemented in it's true essence. General buyers and realty sector will also be greatly benefited by tax benefits like enhancement of limit under section 80C, as it will give buyers more spending power.
Amit Raheja, CMD, Wealth Clinic
The interim budget has been greatly in favour of homebuyers and has promoted affordable housing to a substantial extent. In this budget we expect similar perks from the government for the developers also. We expect the government to grant Industry status to real estate sector which is one of the largest employment generating sector in the economy for ease of doing business along with undertaking steps for single window clearance. It will result in an agreeable environment not only for real estate developers and home buyers but for the growth of the economy of the country also. One of the most important expectations from the Budget is the ways to cut down the EMI burden of the buyers. RBI has cut the repo rate thrice, in which banks have not been able to transfer benefits to the buyers. We expect the government to come up with some policy or sop that can help the buyers get that benefit.
Rajat Goel, Joint Managing Director, MRG World
After becoming a stable government, real estate sector has more expectations from this budget and incentives available to the sector from the budget are very important, any step taken by government will play an important role in recovering from the slowdown so far.
However, there are many aspects which are still obstructing the sector to keep its full speed somewhere. To fulfill the mission of Housing for All 2022, it is very important to overcome these obstructions. First of all, the government should ensure land availability for Affordable Housing. The second most important aspect is the approvals related to the projects. Many times it’s make difficult for the developers to get them delivered within a stipulated time due to not getting timely approval. Therefore it should be mandatory to have a time-bound approval system in the sector. Apart from this, new technology is being used day by day to speed up the construction. Government should encourage the use of these technologies. So that the construction of houses can be done faster and Mission Housing for All 2022 can be retained fast.
Kaushal Jain, MD, Arihant Group
In the upcoming Union Budget, the finance minister should grant infrastructure status to the housing sector which will be motivating for developers. Also, it will be a perfect situation if the GST is revised for construction materials such as cement to make them more affordable. Also the demand that we look up to is having a single window clearance which will be beneficial for both the developers and the consumers.
Sagar Saxena, Project Head, Spectrum Metro
It was good that the same government got repeated. Now there will be no delay in policies or unexpected changes that might have derailed the whole goodie factor that has become a part of real estate sector, especially the first quarter of FY19-20. Sales are going up and market is upbeat, it is now up to the Finance Minister to provide some boosts in upcoming Union Budget to give a push towards betterment of sector.
Harvinder Singh Sikka, MD, Sikka Group
We expect from Finance Minister to more allocation of fund in this budget on improving the infrastructure in tier II and tier III cities so that these cities too could share the load of housing. Off late people are shifting to smaller towns but if this is not supported by proper infrastructure, then the trend might reverse in few years. So, to stop it from happening the work should be done on war front.
Mr. L.C Mittal, Director, Motia Group
The affordable housing segment of the real estate sector has got recognition but the long-standing demand of being granted the industry status has not been fulfilled yet. In this budget we expect the government to extend the industry status to the sector. Further, we expect the government to reinstate Input tax credit benefits as without ITC benefits, the developers are witnessing a significant drop in their profits. With the ITC benefit, property prices will remain under control and thereby will result in elevated sales.
Dhiraj Bora, Head Corporate Communication, Paramount Group
There are many positive policy making and initiative taken by the Modi government towards cleaning up and regulating the sector, but still several policy related issues needs the attention which can make a decisive difference. Long-time pending single-window clearance which can significantly reduce the overall projects cycle time needs to be addressed in upcoming budget.