The first budget of the decade managed to get a thumping response from the Sensex as it continues to be bullish for the second consecutive day. Finance Minister Nirmala Sitharaman budget aims to revive the economy and in doing so there have been large scale measures that have been announced for the healthcare and the infrastructure sector.
There was a lot of anticipation that real estate too may get a lot of focus this year and true to the expectation, Finance Minister in her budget speech on Monday laid emphasis on the affordable housing.
She proposed tax exemption for notified affordable housing for migrant workers. Making the announcement, Sitharaman announced that INR 1.5 lakh deduction on payment of interest for affordable housing extended by 1 year. Furthermore, it was also announced tax exemption for rental housing projects.
Commenting on the measures announced, Dr Niranjan Hiranandani -National President - NAREDCO and MD - Hiranandani Group said, "For the home buyer, the second extension of the deadline till 31 March 2022 for the additional INR 1.5 lakh tax deduction given on loans taken to buy a house in an affordable housing project is welcome, as is the developer whose affordable housing projects also get an extension for tax benefits, for projects completed till March 31, 2022."
He further adds, "Similarly, tax exemption for notified affordable housing for migrant workers, and the deduction on payment of interest for affordable housing being extended by a year will give a fillip to this emerging segment. As affordable housing attracts only 1 per cent GST and INR 1,000 stamp duty in the state of Maharashtra will augment the production of affordable housing in the state".
Aditya Kushwaha, CEO & Director, Axis Ecorp. echoes similar views as he opines, "In the Annual budget for 2021 we can see the Government’s focus on affordable housing. The deduction on payment of interest for affordable housing has been extended by a year. This move will improve customer buying behaviour. At the same time, to boost the investment coming via the NRI route, the taxation has been simplified which will incentivise NRIs to invest in our country as they will get a tax rebate on the rental income."
Anurag Mathur, CEO, Savills India commenting on announcements on Monday said, "
"Real estate specific announcements although few, were targeted towards affordable housing and REITs. Tax holidays and exemptions in affordable housing and debt financing for REITs are expected to strengthen the confidence of all the stakeholders in the residential and office segments".
"The support announced by the finance minister for rental housing too will go a long way in boosting the real estate market and will ease a lot of pressure points in the rental home market," said Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and Proptiger.com
Presenting another perspective in the conversation, Ajay Piramal, Chairman, Piramal Group said, "The introduction of a Development Finance Institution (DFI) to fund long term projects will complement the high focus on infrastructure. With banks remaining evasive towards long term institutional exposures, the DFI is expected to ensure the availability of credit for projects with long gestation periods".
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