In the budget for 9-months last year, the new government had stressed on the vision for making housing more affordable. What is the real estate sector in India expecting from the Budget 2015-2016. Let’s have a look:
Provisions to boost affordable housing:
In the budget last year, the new government had stressed on its vision to boost affordable housing. In the 2015-2016 budget, the real estate sector is expecting provisions to be provided by the government to the developers for making housing more affordable.
Offer incentives to develop green real estate:
The upcoming budget is expected to let the consumers clearly know the benefits of green real estate in the country. The residential real estate developers need much more encouragement for going green. Since the buyers of homes in India are not quite ready to pay extra premium and don’t fully understand the concept of a sustainable residential project, even the developers are averse to enter this segment. The Union Budget this time is expected to offer incentives to boost the development and consumption of sustainable real estate development in India.
Tax incentives for renting out residential properties:
For improving the supply of rental properties in metros and boosting the rental pan-India housing segment the Union Budget is expected to offer tax incentives on rental income. Presently, rental income is treated just like any other taxable income. Tax incentives is required for more residential properties to be rented out.
Speeding up project approvals:
The developers in India have been demanding for speeding up the project approval process. Quicker approvals are expected to widen the supply pipeline, which would in turn help in reducing the prices and ensuring real estate sector’s rise from the slump it has been in lately. The budget is expected to take measures for speeding up the approval process along with measures to ensure quality norms of construction are not compromised resulting in infrastructure failure for new projects.
REIT Fast Tracking:
Political instability, red – tapism and lack of apt regulations had kept the Indian real estate market away from foreign investment funds. The new budget has a great chance to make India friendlier towards foreign investment by introducing a revised tax code. Overcoming the tax counter-productive hurdles is very important for REIT, which can become an absolute booster for the overall economy and the Indian real estate sector.
Real Estate Regulatory Bill Implementation (RERA):
The RERA bill is expected to be implemented this time since the approval for the Real Estate Regulatory Bill has been delayed for quite some time now. With the implementation of the bill the Indian real estate sector is expected to be more open to the investors from foreign countries. This policy is an absolute must for the growth of the Indian realty sector.
LARR counter-productive clauses to be relaxed:
Land Acquisition, Rehabilitation and Resettlement (LARR) Act has been formulated and has been changed again and again for quite some time now. However, it has failed to deal with land bureaucracy. Currently, the LARR Act deters the developers and institutional investors’ big time. The realty sector in India wants to desperately cross this hurdle as a lot of land is required for infrastructure and real estate development. With the Union Government’s vision of affordable housing and development of 100 smart cities across India, the Budget should make suitable changes to the LARR Act.
The real estate sector is looking forward to some major reforms and reliefs from the Union Budget 2015-2016. Let’s see how much expectations this budget can meet for the Indian realty sector.
Source: NDTV Profit, Economic Times