Tag: flat for sale in Sarjapur Road

What’s in Store for the Real Estate Sector in Budget 2017?

What’s in Store for the Real Estate Sector in Budget 2017?

Finance Minister Arun Jaitley in his Union Budget 2017-18 has announced a series of forward-looking moves and fiscal incentives to boost real estate activities. Keeping in mind the ongoing slump in the sector, these moves will provide the much-needed thrust and fillip to the overall realty sectors which should ultimately create favorable environment for the buyers and result in improved revenue earnings for the exchequer.

The key highlights for the real estate sector in Union Budget 2017-18 include:

For Consumers:

  • ‘Affordable Housing’ has been granted ‘Infrastructure’ status
  • For affordable housing, the carpet area of 30 and 60 sq meters will be applicable instead of the existing built up area of 30 and 60 sq meters
  • No cash transaction above Rs 3 lakh to be allowed
  • Rs 20,000 crore loans to be refinanced by National Housing Bank
  • Pradhan Mantri Awas Yojana to receive Rs 23,000 crore
  • Indira Awas Yojana to be extended to 600 districts
  • By 2019, 1 crore rural houses to be developed
  • Holding period for capital gains tax for immovable property reduced from 3 years to 2 years

For Developers:

  • Real estate developers will get tax relief on unsold stock as liability to pay capital gains will arise only in the year a project is completed
  • For the unsold stock, tax break of 1-year post receipt of the completion certificate
  • Rs 2.41 lakh crore has been allocated to boost infrastructure for transportation
  • Allocation for National Highways is Rs 64,000 crore
  • Total allocation for the infrastructure sector to be at Rs 3,96,135 crore
  • New Foreign Direct Investment policy under consideration

The government has maintained its focus on ‘Housing for All’. The programs and policies of Ministry of Housing have successfully been supported by multiple budgetary interventions, resulting in a positive transformation in the realty sector. The Finance Minister underlined the need and importance of granting ‘Infrastructure’ status to the ‘Affordable Housing’ segment.

This certainly comes as a welcome move for the real estate industry and consumers alike and is likely to garner improved participation from diverse private players. It will add to the competition, result in better and varied options for a large consumer-base, and allow first-time homebuyers to invest in their dream homes. On the other hand, consumers can avail cheaper financing which was enabled by the banks and financial institutions, earlier this year, following the demonetization drive.

Focus on Consumer Centricity

Undoubtedly, affordable housing remains the core growth driver for the sector. The increased allocation of carpet area will encourage and attract more consumers to invest in a home in this emerging segment. Low-cost housing will do away with the entry barrier of owning a home for the economically weaker section.

This consistent focus on offering impetus to low-cost housing has been supplemented by the government’s decision to provide interest subvention in housing loan under Pradhan Mantri Awas Yojana. Combined with the recent Budget announcements, this will offer much-needed momentum to mass housing and kick-start markets in peripheral areas and outskirts around the metro cities like Bangalore, Hyderabad, Chennai, Mumbai, Pune, and Ahmedabad. For instance, if you have been planning to buy a flat for sale in Sarjapur Road near Wipro corporate office, a housing project with a block of affordable flats will make it easier for you to own a home without forking out staggering amounts.

The recent announcement will cheer consumers as the majority of lower and middle-income individual or families has no other choice but to live in rental apartments and in particular localities due to unavailability of low-cost housing. This initiative will play a significant role in the country’s economy.