It is that time of the year when all industrial sectors push forth their set of wishes to the finance minister for accommodation in the annual Budget. The realty sector, which is facing uncertain times thanks to high home prices and falling sales, is looking for a slew of goodies from the government.
The sector is seeking tax sops, relaxation of foreign direct investment (FDI) norms and lower interest rates to give sales a boost.
"In the past six months, home loan and project financing rates have gone up and are expected to go up further. If the government will not give incentives to home buyers, demand may come down and the sector will be badly affected," Navin M Raheja, chairman, Raheja Developers told Mail Today. Pradeep Jain, chairman, Parsvnath Developers, said, "External commercial borrowings (ECBs) should be permitted for funding the construction costs of realty projects which qualify for 100 per cent FDI." In the current high interest rate regime, the realty sector has sought to limit home loan rates between 7.5 and 8 per cent.
Hemant Shah, chairman, Ackruti City, said, "Any steps to reduce interest rates on housing loans are welcome. Last year, housing loans of under Rs 10 lakh were given an interest rate cut of 1 per cent. We need similar measures in the new Budget." "Likewise, stamp duty rates on property transactions vary from 5 per cent to 15 per cent across different states (which needs to be streamlined)," he said.
Sanjeev Srivastva, managing director, Assotech Ltd, added, "Budget housing should be exempt from Income Tax ( IT) liability either on the basis of built- up area or the value of property." He said rental income should also be exempt from I-T, to augment the demand for affordable homes and promote houses being let out on rent.
Another common demand from the developer community is to accord 'infrastructure' status to the sector. "The fact that realty projects are not considered 'infrastructure' but when it is a part of the highway or a toll road project, the promoter enjoys income tax exemption is a sore issue," Sunil Dahiya, MD, Vigneshwara Developers Pvt Ltd, said.
Courtesy: Mail Today