Budget 2022 Real Estate Expectations: Rs 5 lakh mortgage interest, 80C income tax amendment, GST cut and more

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Budget Expectations 2022 Real Estate: The Union Budget 2022-23 is expected to be tabled on February 1, 2022 by the Union Finance Minister, Nirmala Sitharaman. This is the 4th budget of the NDA government led by Prime Minister Narendra Modi in his second term. The 2022 budget will be presented around 11:00 a.m. on February 1, 2022. Expectations for the 2022 budget are high as people from various walks of life pin high hopes on the decisions and announcements of the Modi government in various sectors. Here’s what Amit Agarwal, co-founder and CEO of NoBroker.com, has to say about the 2022 budget expectations for the real estate industry.

“The real estate sector has shown extraordinary resilience in the face of the pandemic and is now following a positive growth trajectory. The dynamism of the sector is attributed to many factors such as stable property prices, lucrative builders and historically low home loan interest rates. And this growth can be accelerated with a few measures that could be considered in this year’s budget,” said Amit Agarwal.

Rs 5 lakh interest on home loan

“Buying a home is currently on the priority list for many people. The same has been revealed in NoBroker’s 2021 annual property survey. real estate is in the range of 6.5-7% per annum, but buyers looking to avail a loan of more than INR 30 lakh cannot claim a deduction on the full interest paid in the first few years due to a cap of Rs 2 lakh per annum against the interest rate deduction under Section 24(b) of the Act, the time has come to bring more robust demand into the l buying a house Pushing the tax refund on home loan interest rates from current Rs 2 lakh to Rs 5 Lakh or more could trigger healthier demand for housing, especially in affordable housing and middle-segment categories,” he said.

“Another relevant thing that can be looked at is the definition of affordable housing. Although unit sizes can be standardized, price standardization is not viable in all cities. For example, house prices in Mumbai are significantly higher than those of Kanpur or Kolkata. This is an area that the budget could look at and redefine. If the definition of affordable housing is readjusted to city-specific standards, it will have a positive impact on the sector,” he added.

Moreover, many advantages have been described for the affordable segment over the years. In this sense, if the government also introduced some benefits in mid-segment housing, it would lead to better demand and result in a faster recovery of the real estate sector.

Section 80C of the Income Tax Act 1961

“The budget should pay particular attention to creating a much healthier banking system to foster the accessibility and availability of improved, low-cost credit for home buyers. This can be achieved through the categorization of loans housing by priority area. The budget could focus on amending Section 80C of the Income Tax Act 1961 to increase the time for repayment of principal on home loans. This will to some extent reduce the burden homebuyers by giving them more time to repay the money. This would attract more buyers in the days to come,” he added.

GST

“There is also an urgent need to further streamline the Goods and Services Tax, which is applicable at 1% for affordable homes and 5% for other segments. A 1% cap on the GST for projects under construction would help rapid completion of projects blocked for financial reasons.
Commercial real estate developers, for example, should be allowed to deduct GST paid on building materials. Improving the availability of credit for small developers, who continue to face cash flow challenges due to the pandemic, is also an area that requires government stimulus,” he said.

Reduction of stamp duty

“The reduction of stamp duty in Maharashtra has shown good results. If it can also be reflected in other states, fence keepers would be quick to take the plunge, and it would further boost real estate,” a- he continued.

GST reductions on raw materials, industry status

“A one-stop-shop authorization has been due for many years now. Furthermore, the time has come to give industry status to the real estate sector so that it can benefit from cheaper credit facilities from financial institutions. budget should also focus on providing GST reductions on raw materials including cement, steel, etc. This can bring great relief to the entire developer community and help them to recover faster from downturns caused by COVID-19,” he added.

“There is a huge opportunity in real estate that would allow for a faster economic recovery. Despite the pandemic-induced challenges, the sector which contributes 8% of the country’s GDP has shown resilience and buying a house remains the top priority for a large majority of people for It is time to capitalize on sentiment by delivering compelling benefits that we hope Budget 2022 will incorporate,” he concluded on Budget 2022 expectations for the real estate sector. .

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