The announcement by Finance Minister Arun Jaitley in today’s Budget on providing 100 per cent deduction to the entities to construct houses up to 30 sq mtr in metro cities and up to 60 sq mtr in the non-metro cities can give a boost to affordable housing in India. This can be a game changer as the demand for affordable homes is on a steady rise.
"100 per cent deduction for profits to an undertaking in housing project for flats up to 30 sq. mtr in four metro cities and 60 sq. mtr in other cities, approved during June 2016 to March 2019 and completed in three years. Minimum Alternative Tax to apply," says Finance Minister, Arun Jaitley announced in Budget today.
It is an important step in the wake of Central government’s ambition to provide ‘Affordable Housing for All by 2022’.
“The budget has given provisions to bring cheer to housing sector and will realise home dream for millions of Indians,” Prime Minister Modi noted later in the day.
However, the real estate sector has sent mixed signals. Some see it as a welcome step, while others feel that it is just not enough.
Giving his reaction, V Suresh, former CMD HUDCO told Magicbricks, “This has been a stimulating budget as far as the housing sector goes. Removing service tax on housing units of up to 60 sq mt is a very positive step. Providing tax exemption on housing units of size up to 30 sq mt in metro cities and 60 sq mt in non-metros will boost affordable housing in the country.”
Making a sharp observation on our partner channel Magicbricks NOW, Boman R Irani, chairman & managing director, Rustomjee Group said, “The size of the houses should have been 60 sq m all across India as homes below that size would be too small.”
“This move is significant and in line with the incumbent government's intention to boost affordable housing. The focus on affordable housing will give much-needed impetus to develop greater number of affordable housing projects across the country, thus, directly aligning the agenda with the prime minister’s vision of ‘Housing for All’,” said Abhishek Lodha, managing director, Lodha Group.
Affordable housing vs houses made affordable
Gulam Zia, executive director, Knight Frank India told MB Now in a discussion that the Budget will not immediately help in building up the sentiments in the market. “Time is still not ripe for the market to see more home buyers. The property prices have to come down,” he said.
Answering Zia on that note, Boman R Irani said, “There is no scope for further price deduction from the developers as Rs 37 goes to the government and only Rs 67 comes to developers out of which we manage our costs.”
Adding to the debate, Dharmesh Jain, MD, Nirmal Lifestyle said, “Today, we are taxed by the Centre, state and urban local bodies. Government is taking away a major share. Developers are not the ones who are making money in today’s market.
SOURCE: magicbricks.com
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