‘Service Tax will raise real estate prices, stress the sector further’

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Unchanged interest rates on home loans also brings disappointment

Bengaluru, Mar 02, 2015:

The increase of nearly two per cent in Service Tax will hike the overall costs of home buyers and those availing services from the real estate sector, creating further stresses across the sector, said Sanjay Dutt, Executive Managing Director, South Asia, Cushman and Wakefield.

Except for REITs and curbing of benamitransactions, there was no specific mention alluding to the sector this time around unlike the last Budget presentation.

“With three consecutive bad years for real estate that left developers and other stakeholders gasping for fresh air, the expectations were only building up by the minute for the last couple of months. Unfortunately, the budget has not given them anything to cheer about,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.

‘Disappointing’

JC Sharma, Vice-Chairman and Managing Director, Sobha Ltd, said, “The Budget is disappointing as real estate has not been considered as part of infrastructure or given industry status, something that would have impacted the sector in a very helpful manner for the good of all. Further, the largely unchanged tax slabs for individual tax payers and unchanged interest structure on home loans means an opportunity has been lost.”

MR Jaishankar, CMD, Brigade Group said there is no special incentive for the housing industry in this budget.

Anshuman Magazine, Chairman & MD, CBRE South Asia said the Budget shows an intention to build six crore houses towards the ‘Housing for all by 2022’ initiative, with two crore urban housing and four crore rural housing.

Gagan Banga,Vice-Chairman & MD of Indiabulls Housing Finance, pointed out that the availability of low cost capital is a key enabler for the real estate sector. The sector has a high multiplier effect on the economy and affordable housing is key to realising the social dream of housing for all. Business Line

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