The Union Budget 2017 has had a major impact on the real estate sector of India. Especially with the recent past scenario of the real estate being majorly hit by the government’s drive of demonetisation, the Union Budget 2017 gave this sector a huge thrust. Let us quickly go through the key takeaways from the impact of the budget on real estate
Infra Status that long remained a demand of the real estate industry for the Affordable Housing Sector has finally been granted which runs parallel to the vision of our Prime Minister Mr. Narendra Modi – “Housing for All by 2020”. This tag will facilitate cheaper funding and address issues of private players apart from enhancing the projects to attract more number of investors.
ndividual Loan Refinance:
Individual Loans worth Rs 20,000/- crore will be refinanced by the National Housing Bank in the year 2017-2018. This is believed to provide a major thrust to affordable housing companies.
xemption of Tax:
1 year tax from notional rental income from unsold stock has been exempted by the Government which is sure to help those who hold real estate inventory. This assures a breath of relief to residential developers which were hit by demonetisation and sales dropped significantly.
apital Gains on Joint Developments:
Now onwards, taxation on capital gains in Joint Development Agreement will be done only after project completion. This is sure to reduce litigation issues and boost land availability for development purpose.
educed Holding Period –
Investors gain respite as they qualify for long term capital gains benefits. The Government reduced the holding period to 2 years from 3 years for Long Term Capital Gains from Immovable properties.
radhan Mantri Awas Yojna gets a huge lift:
In concurrence to Mr. Modi’s vision “Housing for All by 2020”, the Government proposed an allocation of Rs 23,000 crores for the completion of 1 crore houses for those living in kachha houses by 2019.
levated Affordable Housing Size:
The last budget saw the Government allowing 100% tax exemption on profits only for those developers building houses with BU (Built Up) area up to 30 sq. meters in 4 metros and up to 60 sq. meters in other cities. The new regulation passed also stated that Carpet Area would be applicable instead of BU (Built Up) Area.
urther reduced Home loan Rates:
There will be a further slash in the rate of interest on housing loan to further come down.
educed Tax Rates:
For individuals, the income tax rate is reduced from 10% to 5% for tax slab between Rs 250,000 to Rs 500,000 which means any person whose income is up to Rs. 5 lacs, the tax liability will be halved. Any person whose income is above Rs. 5 lacs would have a net tax saving of Rs. 12,500.
an on Cash:
Cash transactions of Rs 3 lac and above have been banned.