2017 was an eventful year for the real estate sector. However, it needs a more significant push for robust development. There are high expectations from the upcoming budget, especially since it will be the first in the GST era. Thus needed a clarification on taxation norms for REITs.
A reform that has been long due is granting the industry status to the real estate sector for a proper overhaul. This move will complement the government’s recent initiatives to bring structure to the industry.
While incentives have been provided to boost the affordable housing segment, there needs to be a reduction in the cost of land to incentive developers to build budget homes. Additionally, interest rates on housing loans should be reduced to benefit a broader segment of homebuyers and increase demand.
As for the tax structure, adequate measures need to be taken to bring down the taxes paid by the average Indian to allow greater affordability.
Reducing the stamp duty charges or bringing it under the ambit of GST in the lowest slab will bring about uniformity and make home buying financially easy. The government needs to provide more clarity on the same.
To provide relief to first-time homebuyers, we expect a deduction of Rs 50,000 under section 80EE of the Income Tax Act on loans sanctioned post-March 2017 as well. Click To Tweet
Clarifying the taxation norms for REITs is the need of the hour for listings to start flowing in as it will benefit the entire sector by the large bandwidth of investors.
The government should also focus on infrastructure development as it will drive real estate demand. Increasing the allocated expenditure for infra projects will eventually boost the residential and commercial markets and promote the government’s plan to create smart cities.
We hope for a budget that is conducive and propels the growth of the economy, boosts the real estate sector, benefits homebuyers, and provides relief to the developer community.
This article is contributed by Ashwin Sheth, CMD, Sheth Group
The views expressed here are solely those of the author and do not necessarily represent or reflect the views of RoofandFloor.
