Realty relies on budgetary boost
The real estate industry is pinning high hopes on the upcoming Union Budget 2016 to give the ‘stressed’ sector the much needed boost, said Shishir Baijal, CMD, Knight Frank India.
‘the budget should provide a combination of incentives to boost the development and buyer interest in green real estate in the country’
“With three consecutive bad years for real estate that left developers and other stakeholders gasping for fresh air, the expectations are only building up by the minute. The last budget had a focus on ‘Housing for All’, but did not have a game plan attached to it. We expect sops and exemptions for home buyers to be announced this year,” he said.
Baijal said, “For Real Estate Investment Trusts (REITs) to become a reality, it is important for dividend distribution tax (DDT) to be abolished. Despite, the regulatory approval being in place for quite some time, DDT has remained a sore point for stakeholders. Considering that REIT will be an annuity product, it is a must for the government to focus on removing DDT.”
Anuj Puri, chairman and country head, JLL India, said, “Despite the announcement last year, there has not been a single REIT listing in India to date. While the government has worked towards removing other bottlenecks, DDT has remained a key pending issue. Developers and other asset holders need the government to do away with it in the Budget 2016.”
Anshuman Magazine, CMD, CBRE South Asia, said, “In the upcoming budget, India’s real estate industry primarily hopes for tax exemption for REITs on stamp duty and distribution of dividends. Directives to State governments to work in tandem on related regulatory changes are anticipated too, since certain aspects such as stamp duties are largely State subjects that would require State-level interventions for successful implementation.”
Puri said, “Government should increase the tax deduction limit for housing loans, especially for buyers in metropolitan cities. Also tax concessions on house insurance premiums could be introduced to encourage end users to insure their homes.”
Puri further said, “The budget should provide clear and convincing benefits to buyers of green real estate in the country. It should provide a combination of incentives to boost the development and buyer interest in green real estate in the country. Developers entering affordable housing segment should be allowed cheaper financing options, thereby also providing a shot in the arm for government’s ‘Housing for All by 2022’ target.”
“The Finance Minister should announce a specific date for the implementation of Goods and Services Tax (GST). This major reform will give the industry a very clear taxation structure and induce a major sea change for the logistics architecture, since logistics will be driven by cost and not by a regulatory regime,” he added.
“Implementation of GST will lead to efficiency from the seamless movement of goods as well as the location of warehouses, an important component in the logistics sector. With infrastructure an important focus of the government already, I hope this will continue. The development of infrastructure has a direct bearing on the revival of real estate, which we all look forward to at this stage,” Baijal added.