Wednesday, 9 July 2014

Budget 2014: Real estate looks for growth-oriented road map

From the perspective of the homebuyers, the tax benefit on housing loan interest for self occupied property has remained constant at 1.5 lakh since 2001. However, the real estate prices have increased rapidly leading to a quantum rise in the loan requirement for each home purchase.

The 16th of May 2014 was a landmark day in the history of India. With the nation electing the Modi government, there is a strong expectation of a revival of the economy that has been stagnant for some time now. We are seeking action, and the budget is the first litmus test. Now, all eyes and ears are on Arun Jaitley by bringing about a change for a true economical impact.


On the onset, the Indian market has done quite well in the last few months giving an indication that the economy will revive. Narendra Modi made his intentions clear in his first speech in the parliament as a Prime Minister. He laid emphasis on a pragmatic economy and addressed the right economic realities including a stable tax regime, infusing infrastructure growth in the rural and urban areas of the country and most importantly creating job opportunities. With our leader’s approach on the right track, one can surely expect Arun Jaitley to give us a progressive and a reform-oriented budget.

Due to the rapidly growing industry, SEBI has been aggressively pushing for an evolution and clarity in the real estate investment (REIT) trust. It is time that the government takes measures in ensuring that a real estate fund is created to keep the liquidity flowing in the construction business. A regulation or a policy should be created through which the developers can borrow at lower rates of interest. There will be two pronged benefit of these steps. While easy fund availability will reduce the construction cost for developers, the home buyers will also benefit through better real estate prices. This, in turn, will increase the demand of housing finance and lead to the growth of the retail finance industry due to a better flow of liquidity in the market. Moreover, government intervention would also reduce the corrupt practices in the sector, which would prove to be beneficial for future of the entire industry. This, in the end, will truly benefit the homebuyer.

From the perspective of the homebuyers, the tax benefit on housing loan interestfor self occupied property has remained constant at 1.5 lakh since 2001. However, the real estate prices have increased rapidly leading to a quantum rise in the loan requirement for each home purchase; in this scenario, the limit of Rs. 1.5 lacs needs to be reanalyzed. A significant increase in the exemption limit for self-occupied property, ideally to Rs. 3 lacs, will result in additional tax savings for the home buyer and will also help reenergize the realty sector.

 The country has started off in the right direction by electing a stable government. Now, we are waiting for action. With all eyes and ears on the Finance Minister, there is an expectation from the budget of showing a positive, growth-oriented road map. The real estate industry is keenly anticipating a forward-thinking budget, and at the end, the homebuyer is sure to benefit!


Source: MoneyControl.com

1 comment:

  1. Realty World Infratech Pvt. Ltd. is having best and prominent real estate team of professionals who deals in sale / buy & rent/lease of office space for lease in Noida. I want to share some new commercial project OFFICE SPACE FOR LEASE ON NOIDA EXPRESSWAY

    ReplyDelete