The News Scroll 01 February 2021  Last Updated at 6:32 pm | Source: PTI

Demand and supply of affordable housing to rise on extension of tax sops: Realtors

Demand and supply of affordable housing to rise on extension of tax sops: Realtors
New Delhi, Feb 1 (PTI) The government''s decision to extend additional tax deduction of Rs 1.5 lakh on home loan interest till March 2022 and tax holidays on affordable housing projects in the Budget will boost demand for residential properties, according to real estate developers and consultants.

However, builders were disappointed as the finance minister did not consider many demands, including industry/infrastructure status, single-window approval for projects, input tax credit on GST and extra allocation in stress fund.

The chairman of realtors'' apex body CREDAI, Jaxay Shah, said this will boost overall demand for affordable housing, the fastest growing segment for the real estate sector.

The proposed amendments to allow debt funding through REITs would help in attracting more investments in real estate sector, CREDAI President Satish Magar said, adding that the proposal to make dividend payments to REIT exempt from TDS would encourage retail investors to explore investment opportunities in REITs.

Naredco President Niranjan Hiranandani welcomed the second extension of the deadline till 31 March 2022 for the additional Rs 1.5 lakh tax deduction given on loans taken to buy a house in an affordable housing project.

"The real estate industry appreciates the fact that FM extended the interest deduction for home buyers and the tax holiday for affordable housing projects (both by a year) which should catalyse more growth," said Anshuman Magazine, Chairman & CEO, India, South East Asia, Middle East & Africa, CBRE.

Anarock Chairman Aunj Puri said the affordable housing and rental housing got a big boost with the government extending the period for extra deduction of Rs 1.5 lakh available for loans up to March 2022.

"This will keep demand buoyant for affordable housing in 2021 as well. Further, the extension of the tax holiday for affordable housing projects for one more year will help bring in more new supply within this segment."

Ramesh Nair, former CEO of JLL India, said positives for the real estate sector include extension of Rs 1.5 lakh additional deduction for affordable housing, tax holiday for affordable housing extended by one more year and new tax incentives for affordable rental housing for migrant workers.

Among negatives, Nair said the Budget has no mention of allowing 100 per cent FDI in completed housing projects, no announcement of more funds under SWAMIH, no mention of setting up of a single window clearance system for approvals, not allowing GST input tax credit for under construction projects, no reduction in GST on building materials, not incentivising States to rationalise stamp duty and no concrete announcement with regards to making more credit available for the real estate sector.

Dhruv Agarwala, Group CEO,, and, said the government’s move in the Budget to extend the benefit of additional Rs 1.5 lakh tax deduction on home loan interest, until March 31, 2022, will act as a further impetus to the residential property sector.

Sahil Vachani, MD & CEO, Max Ventures & Industries, said the decision of not to deduct TDS on REITs and InVITs is a welcome move for the real estate industry, particularly the commercial category.

"It will help attract investment in commercial real estate assets and thereby will help boost the demand for A-grade office spaces across the country especially in the bigger cities, which are hubs of employment activities."

Sobha Vice Chairman & MD J C Sharma said: "Some of the proposed laudable steps related to the housing segment will certainly give a fillip to the buyers of affordable homes"

He, however, said industry demands like granting industry status, rationalising the GST rates (by allowing the input tax credit), access to funds and ensuring longer repayment cycles, lowering tax on raw materials, and increasing Rs 2 lakh tax rebate on housing loan interest rates to at least Rs 5 lakh should have been considered.

"While the real estate sector didn''t have many announcements, the continued tax holiday for affordable houses on purchase and loans will create a conducive atmosphere for developers to construct and encourage buyers to invest," Puravankara MD Ashish Puravankara said.

Anong the NCR builders, Gaurs group CMD Manoj Gaur said: "As expected, affordable housing was once again the focus as the government is moving towards ''Housing for all''."

Supertech Chairman R K Arora welcomed the proposal for extension of the existing Rs 1.5 lakh deduction and Exemption under 80IBA for further one year.

Signature Global Chairman Pradeep Aggarwal said affordable housing is set to get further boost as the demand for affordable housing is already high.

Wave group Chairman Manpreet Singh Chadha, said: "Retaining tax holiday on affordable housing projects till March 31, 2022, and the proposal to make dividend payments to REIT and InvIT exempt from TDS is a much-needed relief for the real sector."

Amit Raj Jain, Head of Sales, BPTP, said the government has continued focus on ''Housing for All'' and these measures will certainly boost demand for affordable housing.

Shishir Baijal, Chairman and Managing Director, Knight Frank India, said: "The government has also continued its focus on affordable housing segment by extension of tax benefit by one year. Amid the prolonged pandemic scenario, this extension was needed to support the latent housing demand in the country."

Square Yard CFO Piyush Bothra said the measures such as the one-year extension of the Rs 1.5 lakh deduction on payment of interest for affordable housing and on the tax holiday for affordable projects brings in much needed relief for the buyers as well as the developers.

Mumbai-based S Raheja Realty Director Ram Raheja said, "Within the constraints of a slowing economy and keeping the fiscal deficit under check, the Finance Minister has delivered a balanced budget."

Rattan Hawelia, Founder & Chairman, Hawelia Group, termed it as a disappointing budget for the real estate sector except consideration of extension of loans to purchase affordable homes. PTI MJH MR

Disclaimer :- This story has not been edited by Outlook staff and is auto-generated from news agency feeds. Source: PTI
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