The real estate sector had pinned high hopes on the Union Budget 2015 for introducing various reforms that would not only push the government’s intention of ‘Housing for All by 2022’ but also provide the common man some sops for housing loan and taxations. However, the ‘common man’ seems to be quite dissatisfied. As per a recent reports, more than 51 per cent of the respondents were not happy with the Budget presented. However, 30 per cent of the respondents were satisfied with the measures announced by the finance minister.
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Apparently, those who were not happy were concerned about the expected rate cut in home loans and tax rebates on housing loan repayment that were completely ignored in the speech. In a pre-budget report, majority of the respondents had said that they were expecting measures for reduction in home loan rates and increased limits for tax deduction in home loan repayments.
Voicing the sentiments of the common man, Lalit Kumar Jain, CREDAI chairman says, “A big opportunity to address core issues has been lost. It is fine to talk about policies and a vision like ‘Housing for All by 2022’, but sadly the budget does not give any direction towards executing this. Much like the infra bonds, the government could have launched Tax-free Housing Bonds as well, to allow home loans at 7 per cent to home seekers and provide the much needed funds for the sector.”
However, with several indirect measures such as the ‘benami bill’ and rationalisation of REITs, the sector is expected to benefit in the long run.
Kalyan Chakrabarti, MD, Red Fort Capital mentioned, “I like the budget. Decentralised structure is the focus of the budget. REIT and AIF have attained a leg up. Corporation tax rate decrease road map is cool.”
Sharing the same sentiment, V Suresh, former CMD, HUDCO said “The REIT benefits will be good for more investments for rental, commercial and other properties. Similarly, 2 crore urban and 4 crore rural houses for each family by 2022; allocation of Rs 20,000 crore and tax free bonds for infrastructure is a positive move. All these aspects will definitely impact the realty sector in the long run.”
Therefore, only time would tell as to what extent this would impact a common man. As of now, the real estate sector is concentrating on the benefits these indirect measures would bring to the industry.