Budget 2015: Giving Rise to Hopes of Home Owners

Budget 2013-14 proved quite depressing for the real estate sector with investors looking for other avenues to invest in. As such, the real estate industry is now waiting desperately for the Union Budget 2015-16 to focus on their hopes this time.

With an increase in customer demand, the recent initiatives of the Modi Government have improved the sentiments around the sector in the last few months. Still, the expectations of those in the housing market are high. There is a lot to be done by the government to give a boost to the sector and make housing really affordable for all.

Below are listed some important points that the upcoming Budget should propose to fulfil the dreams of home owners.

1. Give Impetus to Affordable Housing:

Although, the previous budget by the new government has already presented its idea for reinforcing reasonable housing, yet the upcoming budget is expected to announce clear provisions that offer a real boost to the affordable home plans. It must offer lots of incentives on the account for the same.

Mr. Navin M Raheja, honorable Chairman- Naredco, and CMD, Raheja Developers says-“The housing unit size could be restricted to 60 sqmtr carpet area as per the definition of affordable housing accepted by the government. This is one of the significant provisions which will incentivize private sector developers to construct smaller housing units.”

2. Make Home Loans Affordable:

Home Loans play a significant role in building a ‘dream house’ for many. As such, it becomes the responsibility of the government to bring down the interest rates on home loans. The current interest rates in the banks start from 10.15 per cent, which is very high affecting the budgets of most middle-class families. Therefore, the Budget is expected to bring the interest rate on home loans down to 7.5 per cent-8.0 per cent.

MR. Kishor Pate, CMD, Amit Enterprises Housing Ltd. says,” The new government has clearly stated that it wants to make housing for all Indians a reality by 2022. But it is impossible to achieving this goal if home loans do not become affordable to all.”

3. On-Time Project Deliveries:

Delay in project deliveries has affected the real estate world for ages. As such, the buyers are looking towards the government to take measures to address this issue. About 35% respondents expect the Budget to take strict measures to ensure timely possession and penalties in case of delays. Also, they want the Budget to provide more transparency regarding the information about the developers and projects.

4. Eliminate Multiple Taxation on Property Purchase:

The Union Budget 2015 could be a ‘litmus test’ for the Modi government from the perspective of the common man.

Multiple taxes like value-added tax (VAT) and service tax (ST) further act as a financial burden in the purchase of residential property. A relaxation in these would definitely improve the purchasing power of consumers. Introducing Goods and Service Tax (GST) can be a better option in place of these taxes. Also, the real estate industry should benefit from the Budget by making the Real Estate Regulatory bill a reality this year. It will help the industry by providing it an apex body through which all concerns can be addressed clearly and efficiently.

5. Standard Cost of Construction Materials:

Inflation is the main reason behind the capital appreciation of properties in the Indian real estate market. The variation in the prices of the construction material like Cement, Concrete, Iron, etc., is the cause for the rise in the cost of the properties. Therefore, the government needs to standardize the cost of construction materials by setting a maximum limit on their prices.

6. Reduce cost of property Registration:

“The recent hike in ready reckoner rates in Maharashtra, for instance, has been a sentiment setback for the real estate sector. Stamp duty and registration costs are as high as 6 per cent in most cases, and this needs to be reduced by a few base points to aid consumers. Alternatively, a slab-based approach should be introduced. Stamp duty falls under the state government’s purview, but the Center can nevertheless issue a directive to reduce stamp duty costs,” says Kishor Pate.

Therefore, people have set their hopes really high for the upcoming Budget to scale back the value of property registration.

Reduced home rates, tax incentives and faster approvals seem to be the foremost requirement of the hour for both buyers as well as the industry when it comes to Budget expectations. Let’s hope the upcoming budget fulfills the hopes for people to build their ‘dream house’!