Realtors apex body NAREDCO on Thursday demanded infrastructure status to housing and tax incentives for home buyers and developers in the upcoming Union Budget to revive real estate sector.
"Granting of infrastructure status to projects will attract large companies to the sector and inculcate corporate governance," said NAREDCO President Praveen Jain.
The association has asked the government to award infrastructure status to housing sector, at least to cover low and MIG category housing units among its wishlist.
FULL COVERAGE: UNION BUDGET 2017-18
The National Real Estate Development Council (NAREDCO) said that the government should "introduce necessary reforms in the upcoming Union Budget to revive the troubled real estate sector, which is facing slow down because of delayed and unsold properties".
For the sake of convenience and uniformity in law, the built up area in the Income Tax Act should be replaced by the carpet area as defined in the Real Estate (Regulation and Development) Act 2016, Jain said.
FULL COVERAGE: RAILWAY BUDGET 2017-18
NAREDCO has also demanded lowering of housing and project loan interests. Housing loan interest rate should be brought down to 7-8 per cent and project loan interest rate at 10-12 per cent, besides a moratorium on repayment of principal amount of all pending and new loans for three years period.
"This will help in early revival of the real estate sector and mitigation of problems faced by consumers as well as developers," Jain added.
As the government is moving towards implementing the Goods and Services Tax (GST), NAREDCO suggested that real estate should be brought under its purview merging all taxes, duties, charges, cess etc such as land use conversion charges (agriculture to non-agriculture and from one land use to other land use), development charges, and subsequent possession related charges (stamp duty, transfer duty, VAT, Service Tax).
This will put the sector on high growth path and will help achieve the target of building 2 crore housing units by year 2022 under the Pradhan Mantri Awaas Yojna, it said. The industry body suggested a number of other taxation related incentives to embolden the purchasing power of buyers.
"The sealing of Rs 1.5 lakh u/s 80C be increased to Rs 2.5 lakh and Rs 1 lakh out of that be exclusively reserved for payment of principal borrowed for the purchase of a residential house. This will help in boosting the housing stock as well as sales," NAREDCO said.
NAREDCO Chairman Rajeev Talwar said: "Consumers are already burdened because of the problems of the industry. supporting the industry will help consumers indirectly. To boost savings and sales, it is important that government looks at incentivising the consumers in all possible ways."
Given the example of cities like Delhi and Mumbai where most houses are priced Rs 50 lakh and above, Talwar added the tax sops in the upcoming Budget should cover such segments too.