Budget expectations from RICS Attributed to , Mr Sunil Aggarwal, Associate Dean and Director, RICS SBE.

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New Delhi, January 19, 2018:

Industry status:

In the Budget of 2017, the government accorded industry status to the affordable housing segment. In this year’s Budget, we would like to see industry status conferred on the entire real estate sector. This has been a long pending demand of the industry. The sector, directly or indirectly, contributes to over 15% of India’s GDP. But, without an industry status, developers are forced to borrow at high interest rates and comply with stringent evaluation process.

Inaccessibility to funds at reasonable rate of interest delays construction process and increases the final cost of homes impacting the end consumer. We hope to see this announcement in this year’s budget.

Tax exemption for REIT investors

In the case of REIT’s, it would really help if the government looked at 100% tax exemption for Indian investors. There should also be waiver of capital gains for the developer at the time of transfer of property into REIT and removal of service tax on lease premises.

Bring real estate under GST:

Real estate sector should be brought under the purview of GST.We expect rationalisation of GST rate at 12 per cent and inclusion of stamp duty under GST. GST at the rate of 18 per cent on long term leased land is not healthy for the industry and this anomalyneeds to be corrected. Input credit on construction of commercial buildings against the lease rentals must also be given. This will help REITs become a reality in India.

Tax incentive for first time home buyers: 

A first time homebuyer can claim an additional tax deduction of up to Rs 50,000per financial year on home loan for both principal repayment and the interest paid.The additional deduction is given on loan up to Rs 35 lakh, only if the property value does not exceed Rs 50 lakh. We believe the deduction should be extended to all first time home buyers, irrespective of the property value. There is a huge demand for housing in India and the government should incentivise home buying, especially for first time home buyers. Also, tax concessions on house insurance premiums could be introduced to encourage home buyers to insure their homes.

Insurance for land title:

The government must incentivize land title insurance. Indian real estate has a problem of unclear titles. There are many cases of defective property titles and litigation over disputed ownership of land. Land title insurance will protect potential land/property owners,against loss from defective titles.

Additional investment in infrastructure development in metro cities:

The upcoming Budget should allocate a specific amount for developing infrastructure and improving connectivity in the peripheral areas of cities, especially the metros. Without this, it will be difficult to provide affordable housing in cities.

Corporate Comm India(CCI Newswire)