The budget 2016 can be considered as positive for the real estate sector. Industry players claimed that tax sops for first home buyers and incentives on development of affordable housing projects will receive demand in the sluggish property market. Some might be dissapointed that their demand for providing industry and infrastructure status to the realty sector was not taken into considerations.
The Budget 2016-17 has put up an additional deduction of Rs 50,000 on loan interest for the first time home buyers. Moreover, the budget has waved off 100% for profit on development of affordable housing apart from the exemption of REITs from dividend distribution tax. CREDAI President Getamber Anand has commented that “it is overall a very positive budget for the real estate sector”.
The president further believed that this spur will bring a relief for the home buyers who waited for special incentives for investing or buying home. The Finance minister has taken the right steps in order to boost housing sector and ensure ‘housing for all’ programme to be a reality by the year 2020.
DLF CEO Mr. Rajeev Talwar has commented that 2016 budget has been a very positive plan for the real estate sector in India as tax incentives have been provided to the first home buyers as well as housing project developers. The CEO is even confident about the fact that this budget will bring growth in the housing demand and significant supply as well. Now let us look into what budget has offered for the citizens:
-100% deduction for profits to an undertaking from a housing project for flats up to 30 square meters in four of the metro cities. On the same time, it is 60 square meters in other cities approved during June 2016 to March 2016 and is completed within three years of approval. Only the minimal alternate tax will be applicable to these undertakings.
-Home buyers will be given a deduction for additional interest of Rs 50,000 per annum for loans up to Rs 35 lacs sanctioned during the next financial year, provided the value of the house does not exceed Rs 50 lacs.
-Any distribution made out of income of SPV to the REITs and INVITs having specified shareholding will not be subjected to Dividend Distribution Tax.
As an impact on the real estate sector the annual budget 2016 will bring various changes. Additional interest deduction of Rs. 50,000 annually would result in an increase in demand from the first time home buyers. And this range of people constitute around 40-50% of the demand. Moreover, there would be a change in the companies individually in the real estate sector. Most of the premium companies would be benefitted under this budget plan 2016. The mid-income developers will however stand to benefit from government’s push for low cost housing projects.
The Budget 2016-17 has put up an additional deduction of Rs 50,000 on loan interest for the first time home buyers. Moreover, the budget has waved off 100% for profit on development of affordable housing apart from the exemption of REITs from dividend distribution tax. CREDAI President Getamber Anand has commented that “it is overall a very positive budget for the real estate sector”.
The president further believed that this spur will bring a relief for the home buyers who waited for special incentives for investing or buying home. The Finance minister has taken the right steps in order to boost housing sector and ensure ‘housing for all’ programme to be a reality by the year 2020.
DLF CEO Mr. Rajeev Talwar has commented that 2016 budget has been a very positive plan for the real estate sector in India as tax incentives have been provided to the first home buyers as well as housing project developers. The CEO is even confident about the fact that this budget will bring growth in the housing demand and significant supply as well. Now let us look into what budget has offered for the citizens:
-100% deduction for profits to an undertaking from a housing project for flats up to 30 square meters in four of the metro cities. On the same time, it is 60 square meters in other cities approved during June 2016 to March 2016 and is completed within three years of approval. Only the minimal alternate tax will be applicable to these undertakings.
-Home buyers will be given a deduction for additional interest of Rs 50,000 per annum for loans up to Rs 35 lacs sanctioned during the next financial year, provided the value of the house does not exceed Rs 50 lacs.
-Any distribution made out of income of SPV to the REITs and INVITs having specified shareholding will not be subjected to Dividend Distribution Tax.
As an impact on the real estate sector the annual budget 2016 will bring various changes. Additional interest deduction of Rs. 50,000 annually would result in an increase in demand from the first time home buyers. And this range of people constitute around 40-50% of the demand. Moreover, there would be a change in the companies individually in the real estate sector. Most of the premium companies would be benefitted under this budget plan 2016. The mid-income developers will however stand to benefit from government’s push for low cost housing projects.
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