On the back of the recent policy initiatives by the government to bring in more transparency, India’s
One of the key initiatives for the residential market is the Prime Minister's campaign of Housing for All by 2022. Incentives directly impacting this will provide a boost to the affordable housing segment and go a long way in fulfilling this goal. This includes exemption of service tax under GST for affordable housing, exemption of stamp duty for homes bought below a ticket size, increased funding to the National Housing Bank (NHB) for cheaper mortgages, standardized costs of building materials, faster approval processes, and a targeted fund allocation for low cost housing projects. Moreover, to urge more private builders to enter the affordable housing section, the Government should consider offering land and building materials at subsidized rates to these developers.
Another key ask of the industry from the upcoming budget is for certain tax benefits to be announced. This includes allowing investors to exit/sell following a period of two years with a lower tax rate, tax breaks for NRI’s and tax reduction to the consumers from the date of booking of the property and not from the date of ownership, reviving demand in the market. Rationalizing of stamp obligations for Union Territories and improvement of property expense evaluation procedures for individual states could also possibly increase transactions. The segment additionally seeks the removal of the Sunset clause for Special Economic Zones (SEZ's) as withdrawal of any tax incentives from them directly impact exports and job creation. These benefits would go a long way in further encouraging transparency in the sector and boosting consumer and investor confidence.
Much is hoped for from the budget which will be presented on 1st February, 2017. India’s position as a bright spot bright spot in the global economic environment coupled with a rising maturity among consumers and investors is working towards bringing back the much needed positive sentiment in the market. Amid indications that the Government will continue with its ambitious reform agenda in 2017, the budget will be an important tool to soften the rough edges around these landmark decisions.
(This post is authored by Anshuman Magazine, Chairman, India and South East Asia,