Budget 2016: Here’s what a home buyer wants from the Modi government!

The murky real estate sector is betting big on the Budget 2016. With a slew of reforms expected to be announced in the upcoming budget, here’s what the expectations of a home buyer are from the NaMo government’s Union Budget 2016!

“The Union Budget is an eagerly-awaited annual event which Indians follow closely, as the decisions and allocations announced by the Finance Ministry have great pertinence to both individuals and industries. The real estate sector is sensitive to many of policies that are announced both for various industries and individuals. The realty sector is just emerging from a prolonged and painful slowdown, and is looking for all and any signs of light at the end of the tunnel. This fact makes Union Budget 2016 all the more critical, and the real estate industry has many expectations from it,” said Anuj Puri, chairman and country head of JLL India.

Financial protection from project delays

Home buyers are calling the shots in the real estate sector. And the innumerable delays and failure in deliveries of the projects, the confidence of the home buyers is really low. Thus, for the realty sector to grow, it is important for the stakeholders to win their confidence. And this can only be done, if the government introduces policies that offers protection to the investors.

“The Union Budget should pay specific heed to this pressing need. On purchase into an under-construction property, buyers can only claim tax benefits of Rs. 2 lakh after possession if construction is completed within three years. The benefits reduce to Rs. 30,000 if the builder delays construction beyond this - and they pay higher interest. First-time home buyers purchasing properties for self-use additionally pay rent,” noted Puri.

He suggested that the Union Budget should make tax provisions for a home buyer from the time he starts paying interest on housing loans. “Instead of allowing home buyers tax benefits post-possession, the Union Budget should make a provision that allows these from the time they start paying interest on housing loans. This will ease their monetary burden considerably and make increase the velocity of home loan disbursements,” he noted.

Raise the tax saving cap on housing loan and insurance premiums

Buying a home is an expensive affair and needs large investments. Thus, it would be nice if the government increases the tax deduction limits on home loans and insurance premiums. While the current limit is of Rs 2 lakh, the government must remember that the prices of property in key markets is skyrocketing at a rapid pace!

“Also, tax concessions on house insurance premiums could be introduced to encourage end users to insure their homes. Similarly, the tax exemption limit should be increased by about Rs 1 lakh and be auto-set to match inflationary trends in a financial year,” he added.

Raise house rent deduction limit

The startup community is growing fast and thus self-employed people too is growing rapidly. For those who are working in an organisation, the house rent allowance can go up with time. However, for self employed home buyers, the tax deduction limit is restricted up to a meager Rs 2,000 under Section 80GG. The Modi government can certainly work on increasing this limit.