SOURCE – IndianHousingProjects.Com
Every Indian is eagerly looking forward to the upcoming Union Budget and see whether the Finance Minister of India will provide any relief to Housing sector. Developers expectations are already high due to positive decisions taken up by Government in recent times to boost the market sentiment. Everybody is hoping that the Union Budget this year will provide cheer to prospective home buyers who have been deterred for various reasons.
Affordable Home Loans
The Union Budget is expected lower the rate of interest for home loan seekers. Currently, banks are offering Housing loan at the interest rates between 10.15-10.40%, which is too high. Paying higher interest has severe impacts on the family budgets of most of the middle-class people. That is one of the main reason they withdrawn themselves from taking home loans. The budget should bring the interest rate on home loans down to 7.5% – 8.0%. The new government is insisting to make ‘Housing for all’ a reality by 2022. And achieving this goal, would be difficult with the current rate of interest on Housing Loans. While Developers across Indian realty markets have already been vocal in demanding reduced rate of Interests, so that the unsold stock of inventories would be cleared promptly and positive atmosphere could be created in people’s mind.
Avoid Multiple Taxes On Property Purchase
The budget should also clear the complications of multi taxes in the purchase of residential property. As of now, home buyers are required to pay service tax and value-added tax (VAT) on top of stamp duty and registration charges. Introduction of Goods and Service Tax (GST) would be a better alternative of current tax structure. Also, the common man expects this Budget to make the REIT bill, a reality in current fiscal year. So that, the realty industry could be brought under an apex body and all their concerns would be addressed transparently and efficiently. Reduction in service and excise tax rate is also on the wish-list of people.
Raise Income Tax Exemption Limit
Income Tax Payers are looking forward for a increase in the tax exemption limit. While, increase of the basic limit will mean a higher disposable income, more spending power and savings. Considering present inflation rate, Economist & policiy makers also feels that the tax exemption limit should be increased from the present Rs 2.5 L to Rs 3 L. And the slabs should also be categorized in more practical manner from growing salary parcels point of view . In the addition, Maximum exemption of Interest paid on Housing loans in an year under Income Tax should be raised from the existing limit of Rs 1.5 L to Rs 3 Lp.a.. Further, taxpayers expects this exemption to be made applicable even for more than single property purchase. Well, this may not be an unreasonable demand if we look at the current situation where a single home is not just enough to accommodate a growing family. The finance ministry must take a note of this fact and should provide relief accordingly, to both first and second home buyers.
Reduce Stamp Duty
Another important demand is of reduction in the rates of property’s registration fee(Stamp Duty) across the country. Hike in land and property rates has already been a major setback for the real estate sector. Stamp duty or registration costs in some of the cities are as high as 7% and this definitely needs to be reduced & be the same for every city. Alternatively, a slab-based approach may also be introduced. Though, stamp duty are under the ambit of state government but the Center can always suggest state Governments, measures to reduce stamp duty costs.
Since Real Estate sector is one of the major factor in the growth of an Economy that’s why it is required to take these demands & Expectations of Home Buyers & Developers seriously. A sincere effort in this regard may revive the dwindling sentiment of Property markets across Delhi NCR, Mumbai, Pune, Bengaluru , Chennai & Hyderabad etc.
AUTHOR – Aashish Palliwal
SOURCE – IndianHousingProjects.Com