In order to revive the recession-hit property industry, the 2017 Union Budget featured an announcement that was beneficial to homebuyers and developers alike. The finance minister gave affordable housing an infrastructure status, this move is aimed at giving affordable housing a boost. This proposal has been received positively by the real estate industry, directly from middle-class homebuyers, developers, and mortgage loan providers. The ultimate goal of the Affordable Housing Sector Infrastructure status is to further the government’s goal of providing housing for all by 2022.
Let’s find out what benefits real estate developers and home buyers will get:
Greater investment in affordable housing:
The 2017 union budget also proposed that NBFC provide up to Rs 20,000 crore in individual loans. Affordable housing means the likelihood of great investment opportunities as homebuyers can take advantage of loans at a cheaper rate. Many players and new lenders are predicted to emerge with this move as the interest rate moves down resulting in high demand for residential real estate.
Tax exemption for developers:
Developers will get some tax relief. The profits obtained by the builders will not have to pay taxes during the five years. Tax incentives assigned to infrastructure projects will result in lower prices. The demand for affordable housing is likely to increase given the extra money that people will have available due to the proposed 5% income tax rate deduction for taxpayers earning less than Rs 5 lakh.
Carpet area will be counted instead of built-up area:
The biggest change in the budget was the inclusion of the carpet area, instead of the built area. A carpet area limit of 30 m2 will apply in case of municipal limits of metropolitan cities, while the limit will be 60 m2 for the rest of the countries. This will ensure a spacious home. The carpeted area rule is likely to impact construction projects to meet affordability criteria.
Interest Grant:
Under Prime Minister Awas Yojana (PMAY), the government will provide the interest subsidy of 4% and 3% on loans up to Rs 9-12 lakhs. This is said to provide a good boost to mass housing in the eight metropolitan cities across the country.
Affordable housing has caught the attention of many private equity funds and is also receiving inquiries from foreign investors, even before the announcement of the 2017 union budget. Equity funds and foreign investors are also expected to increase their involvement in the sector. real estate. In short, the budget has positive measures for developers, consumers and investors.
