Budget 2022: Realtors demand better incentives for homebuyers

With demand for residential steadily bouncing back, realtors in the country are demanding consumer friendly measures from the finance minister Nirmala Sitharaman in the upcoming Budget to boost home sales further.

From raising the decades old cap on the deduction against home loan interest to increasing the horizon of affordable homes in key metro markets, most of the demands from the country’s real estate developers are focused on incentivising home purchases.

According to Niranjan Hiranandani, Co-founder and Managing Director of Mumbai-based real estate major Hiranandani Group, in the upcoming Budget a stimulus will help the sector’s growth momentum to sustain. “We demand raising the Rs 2 lakh cap to Rs 5 lakh on deductions on home loan. This would not cost more than Rs 5,000 crore directly to the exchequer but, in return, it will help boost the sector to a much greater extent. This is long due as the cap was imposed some two decades ago and its high time for a revision”, he told Business Today.

Further, given the high land prices in and around the key metro markets, increasing the Rs 45 lakh cap on prices of affordable homes is important. According to Hiranandani, for metro markets the cap should be raised up to Rs 1 crore so that more number of buyers are incentivised and are thus encouraged to purchase a home.

According to Pankaj Bansal, Director, M3M India, reduction in taxes and additional rebates provided by the government will encourage more millennials and Gen Z buyers to enter the housing market. 

“Buyers are looking for better tax rebates. Nearly to-third of young Indians – below 35 years of age - are emerging as borrowers of home-loans. These are all active home-loan audiences and jointly, with the age group of 36-45 years - account for 53 per cent of annual originations. Investments in real-estate from these young millennials will only grow with the relaxation in taxes and rebates by the Govt in the Union Budget”, he said.

Pradeep Aggarwal, Co-Founder & Chairman, Signature Global and Chairman of ASSOCHAM National Council on Real Estate, Housing and Urban Development is of the opinion that increasing fund allocation for Pradhan Mantri Awas Yojana will be helpful. 

“We expect the government to double the amount of fund allocation for Pradhan Mantri Awas Yojana to enable more people to realise the dream of owning a home. This will also help achieving government’s goal of Housing for All by 2022.”
Additionally, Aggarwal demands incentives for developers amid rising cost of operations. “The Finance Minister will have to pay attention to the Input Tax Credit, reduce the goods and services tax (GST) to single-digit on building material and continue tax holiday for affordable housing developer”, he told Business Today.

“One of the most long-standing demand being ‘Industry Status to Real Estate Sector’, not having an ‘industry status’ becomes difficult for real estate sector to avail legitimate finances from banks and other financial institutions.  It will 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 end-users,” said Amit Modi, Director, ABA Corp & President Elect, CREDAI Western UP.

According to Deepak Kapoor, Director at Noida-based Gulshan Group, while the  real estate market sentiment is way more positive this year, when compared to the two pandemic years gone by. Kapoor also feels that its high time the government confers industry status to the sector. “That will give developers ease of availing cheaper credit facilities from financial institutions and banks. Terminating stamp duty and registration charges in the gamut of GST would be highly acknowledged. The sector is counting on the government,”, he said.

Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and Proptiger.com said, to deal with the legacy issues and new challenges, the real estate sector needs support in the upcoming Budget. 

“The corpus of the government-backed stress fund SWAMIH should be hiked to at least Rs 1 lakh crore. The current corpus of Rs 25,000 crore has already been committed. This will help in completion of stuck projects and bring back the much-needed consumers' trust in the under construction property market,” he said.
 

Also Read: RIL clarifies on Rs 750 cr grant loan to Shapoorji Pallonji company

Also Read: Budget 2022: A sub-par track record of fiscal consolidation; will it change?