Chennai: Enthused by the government's ambitious 'Housing for all' policy, the real estate sector seeks definite directions on the policy front in the upcoming budget. The success of housing for all requires mechanisms for adequate funding for low cost buyers and developers as a prerequisite, say realtors.
While long-term mortgage market is well developed for middle and high-income groups, customers falling under low and moderate income groups find it difficult to access finance. Even access to capital for developers too is highly under served, said Mr. C Shekar Reddy, National President of CREDAI.
Funding limits of Housing Finance Companies (HFCs) should also be augmented, he said. Credai also sought the government should increase the threshold limit to Rs 5 lakhs for deduction on interest on housing loans under section 24(b) of the income tax from the current limit of Rs 1.50 lakh.
CREDAI recommends that ECB for construction finance approval be moved to the automatic route with certification from a reputed Architect for the plans which meet the criteria of Affordable Housing definition.
Mr. Reddy also called for redefining Priority Sector Lending (PSL) status as for now only housing loans below Rs 25 Lakhs in metros qualify PSL. He also sought hike in PSL limit to Rs 35 Lakhs and the annual increase be automatically pegged to the WPI.
“Real estate sector is looking forward to the Exemption of Service Tax for housing projects. The transaction taxes inclusive of the service tax, VAT, Registration and stamp duty etc for a buyer has sharply risen over the past few years and therefore need to be brought down from 30-35% presently to about 15%, which will make housing affordable for all,” Mr Reddy said.
He also called for Infrastructure Status should to be extended to Housing and Real Estate Sector to enable access to funding from banks and other financial institutions at a much lower cost.
