Budget 2019: Here's what homebuyers, builders can expect from Modi govt

Budget 2019: As the Bharatiya Janta Party (BJP)-led Central government is all set to present its sixth and last budget ahead of Lok Sabha elections 2019, real estate industry is expected to witness some significant policy changes. As per market experts, the current residential real estate market is in distress and expects the government to bring the sector under the new goods and services tax regime. Even the National Real Estate Development Council (NAREDCO) has suggested rationalising the goods and services tax (GST) rate on under construction properties by bringing it down from 18 per cent to 8 per cent with land abatement. Apart from the tax viewpoint, both home buyers and real estate developers hope that the upcoming interim budget would bring some positive changes in the sector. As buyers continue to pay their EMIs while still waiting for possession of their homes, they expect the government to take steps for the creation of a stressed asset fund to deal with the issue. As cash crunch remains one of the prime roadblocks in the industry, Industry body FICCI has recently suggested the government to increase the income tax deduction limit for individuals on interest payment against loans taken for acquisition or construction of the self-occupied property. Speaking about the expectations of the real estate industry from the government, G Raghavan, CEO- Bhartiya City Developers said that industry has already started with various measures to reduce input cost and boost growth of the sector be it residential, commercial or infrastructure. “In that case easing of land acquisition procedures and action of single window permission will be of great help to the industry,” Raghavan said. “Real Estate Industry has been grappling with multiple factors such as demonetization, GST & RERA. Definitely, these steps have brought in more transparency, regulation and much required streamlining in the real estate sector benefiting both the developers and home buyers,” he added. In Budget 2018, the Modi Government announced Rs.3 lac crore for the MUDRA project, under which, loans up to Rs.10 lac were to be extended to non-corporate, non-farm small/micro enterprises. The scheme has helped in sorting out working capital needs to local developers. “The recent years have witnessed actions towards positive economic growth, affordable housing and infrastructure push. Also, in the long term GST and RERA will prove to be helpful. However, more supportive actions to reduce the input costs, minimize bureaucracy and far growth in the real estate sector are essential,” Raghavan said. It was also reported that the finance ministry is mulling on a couple of measures like increasing the savings limit under Section 80C of the Income Tax Act, providing tax benefits to pensioners and lowering of interest rates on housing loans. “I believe that the scope of housing loan should be extended. Including the cost of interiors as part of the loan will enable more people to make their dream home a reality," said Parushni Aggarwal, Creative Director of Nikoo Homes As the cost of lands and housing plots increasing substantially, the components of interest and principal have increased too. The budget should incentivise home purchases for developers to get more business in the coming financial year.