Budget 2017: Reforms that the realty sector needs the most

As budget 2017 closes in, the real estate market is ready with its list of demands from the finance minister. Of these, some demands have a good chance of being addressed in the upcoming budget session.
Reforms that the realty sector needs Sachin Bhandari, CEO of VTP Realty, expects budget 2017 to bring more clarity in key reforms. According to him, the following are the steps required:
“Reforms in labour law: India has an intricate number of laws governing labour regulation. Single-window labour compliance process for industries, friendlier provident fund (PF) facilities, improvement in the ‘Rashtriya Swasthya Bima Yojna’ and focus on skills development and apprenticeship training, will have a positive impact on the realty sector in the long run. No matter how crucial these reforms are for the benefit of India’s economic future, their success depends on how the government implements them, given the large population of our country.
Reforms in consumer protection law: Our government recently introduced a new Consumer Protection Bill, which promises to address consumer matters in an all-inclusive way, by offering executive, quasi-judicial and judicial remedies. This is important, as grievance redressal will be faster and it will ensure more transparency by standardising business practices and transactions.
Reforms in the RBI Act: This will ensure value and transparency to monetary policy decisions, which is a must for the real estate sector. This will also help to contain inflation and maintain stability in real estate prices.”
Measures that could boost home buying Home loan seekers are also hoping for an increase in the present interest deduction under Section 80C, from Rs 1.5 lakhs to Rs 2.5 lakhs, as well as further benefits/deductions on the repayment of the principal sum, borrowed for purchase or construction of a residential house property.
See also: Budget 2017: 3 key hopes of the realty market
“In accordance with the taxation provisions, in case of individuals, income tax is levied on the notional income on additional house property, which is deemed to be a let-out property under the Income Tax Act. Consequently, individuals are made to shell out tax on notional income.
The concept of taxability of deemed rent on notional basis, is expected to be withdrawn,” feels Nishit Dhruva, managing partner, MDP & Partners.
Experts believe that the government may also look at long-term funds to boost the infrastructure sector. Hence, it may be apt to re-introduce a deduction like Section 80CCF for investment in long-term infrastructure (earlier introduced in AY 2011-12 and AY 2012-13), to finance the infrastructure sector. This deduction could be introduced with a limit of Rs 50,000, which will boost real estate development.
Key expectations from the Union Budget 2017-18 Key expectations Current status Clarity on key legislations and easing of REIT guidelines GST bill passed in August 2016; four-tier GST rate structure of 5%, 12%, 18% and 28% across commodities has been proposed. May 2017 deadline set for implementation of the Real Estate Regulation Act (RERA); states have begun finalising rules. Further easing of REIT guidelines in November 2016. Urban infrastructure schemes such Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Smart Cities mission 60 smart cities announced so far and granting of investments underway. Almost 490 projects, with an investment of Rs 6,571 crores in 2016, have begun under AMRUT. Pradhan Mantri Awas Yojana (PMAY), affordable housing and easing of home loan rates 100% service tax exemption for construction of affordable housing, under government schemes. In November 2016, the government allowed online application for affordable homes under PMAY (urban). On December 31, 2016, the government announced a 4% and 3% interest rate rebate for housing loans up to Rs 9 lakhs and Rs 12 lakhs, respectively. Additionally, loans of up to Rs 2 lakhs for new housing/ extension of housing in rural areas, will receive an interest subvention of 3%. Note: Data provided by CBRE Research, highlighting the key expectations from the upcoming budget
By: Housing.com/news