Union Budget 2017: Own a house for EMIs as low as Rs 6,000

Hyderabad: Infrastructure and real estate sectors cheered the Union Budget saying that their long-pending demand for according infrastructure status for affordable housing had been finally realised.

They said this would help builders offer a 750-sq.ft. two- BHK flat in Hyderabad for Rs 15 lakh, and buyers could own a house by paying an EMI of as low as Rs 6,000, an amount they would be paying as rent.

This would make housing affordable for all and help the Centre in achieving the goal of ‘Housing for All by 2022’, they said. Infrastructure status would help builders secure funding from financial institutions at lower interest rates which could be passed on to the buyers. It will would check the flow of black money into the sector. The infrastructure sector got the highest-ever allotment in the Budget at Rs 3.96 lakh crore, which would pave way for taking up major projects.

Prominent builder and Credai former chairman C. Shekar Reddy said, “There is already an interest rebate of 6.5 per cent on home loans of up to Rs 6 lakh. The PM had announced a few more rebates on December 31 last year. Banks have reduced home loan interest rates recently and loans are available for 8.35 per cent,” he pointed out.”

“If all rebates are taken into account, the net interest rate to be borne by buyers of affordable houses costing up to Rs 15 lakh would be just 5.35 per cent. This is almost equal to inflation, resulting in zero interest. We have been representing to Centre for the last 10 to 15 years seeking infra status for the housing segment. We are overwhelmed that it has become a reality,” he said.

Explaining the advantages of securing infrastructure status, Mr Reddy said, “It will help get the housing segment listed under the priority sector for lending. We will get easy loans for cheaper interest rates from banks. At present, we are forced to take loans for higher interest rates for outsiders. This is also resulting in flow of black money into the sector. All this will be resolved now.”

The Telangana Real Estate Developers Association hailed Union Budget for relaxing long-term capital gains, joint development agreements and giving tax rebates for builders.

The association members hoped that the rebate for individuals earning up to '5 lakh would help increase their disposable income and this would spur consumption and result in demand for housing.

“The reduction in time limit for capital gains to be considered as a long-term gain from 3 years to 2 years is a welcome move. Under the latest provisions, developers will get a year to pay tax on notional rental income on completed unsold residential inventory. There will be more supply in housing market now,” Mr M. Vijay Sai, general secretary, TREDA told this newspaper.