Housing industry seeks tax sops, lower rates

Chennai: Realty bodies seek tax incentives and better interest rates for home buyers in order to spur demand for housing. Further rollover of bank loans and moratorium on interest payment will help developers complete their stuck projects across different segments.

Industry finds that the stress fund allocated to the housing sector with several riders will not increase demand among homebuyers.

According to Satish Magar, President, Credai, government has to provide incentives to the home buyers. Though RBI has been reducing repo rates, homebuyers are not receiving the benefit due to transmission issues. “Government has to take steps to provide better interest rates for homebuyers. Further, the capital gains on property have to be rationalized so as to attract the long-term investors. Currently, the long term capital gains on shares are 10 per cent and that on property is 20 per cent,” he said.

Providing Input Tax Credit benefit will help control property prices and thereby boost sales. Indian real estate also has to be made more attractive to foreign investors and for this government has to enhance incentives, said Anuj Puri, Chairman, Anarock Property Consultants.

Further, the real estate sector needs more clarity on the definition of affordable housing and middle income housing. In cities like Delhi and Mumbai, where the real estate prices are higher, most of the properties are priced more than Rs 45 lakhs and hence do not fall under the affordable category.

“The government must seriously consider revising the pricing of homes that fall within the affordable housing price band, city-wise. While the prescribed unit size of 60 sq m carpet area is fairly appropriate, the prescribed pricing restrictions are not viable across most cities except in the far-flung peripheries which lack liveability and accessibility,’ said Puri.

Further, the industry wants government to provide relief on a broader basis. “The non-NPA and non-NCLT projects can anyway secure bank funding to complete their projects. Most of the stuck projects in the early stages are left out. The liquidity crisis in the NBFC space has affected many. So they need a rollover of loans or a moratorium on interest payment so that they can use the cash flow towards finishing pending projects,’ said Magar.