BANGALORE,: The Union Budget for the year 2011-12 has nothing for real estate segment. Finance Pranab Mukherjee has failed to address various issues related to the real estate industry.
Earlier, Mukherjee had promised to rationalise the stamp duty across the country but nothing has been said about it while presenting the budget.
NO UNIFORMITY IN STAMP DUTY
It was said that the finance minister wanted to fix the stamp duty at 4 per cent. As of now, there is no uniformity in stamp duty across the country. It varies from state to state.
For example, a buyer has to pay a seven per cent stamp duty in Karnataka while it is nine per cent in Tamil Nadu and five per cent in Andhra Pradesh and 8.5 per cent in Kerala.
NO RELIEF FROM SERVICE TAX
The other important issue is the service tax. Many builders expected the abolition of the 10 per cent service tax that was being paid by the buyers. It is a burden for many buyers to pay the service tax apart from stamp duty.
The exemption would have helped a number of middle-class families who had to invest their life time savings to have a shelter in metropolitan cities. Let us hope the finance minister to come to the rescue of middleclass people because it would be difficult for them to pay the service tax. For example, if an apartment is priced at `30 lakh, the buyer has to pay `3 lakh as service tax apart from `2.1 lakh as stamp duty in Bangalore.
NOTHING OFFERED TO GO GREEN
The government has been spending a lot of money to create awareness among the public on environment but the finance minister had offered nothing for the sustainability of green buildings.
A little bit exemption of tax would have encouraged others to take up construction of green buildings.
1% REBATE NOT OF MUCH HELP
The 1 per cent interest rebate on `25 lakh housing loan will not be a much help for people who want to buy houses in metropolitan cities.
Neither an apartment nor a small house is available for `25 lakh in major cities. It would be have been a great relief had the finance minister extended this interest rebate to housing loans up to `35 lakh.
The present limit of `25 lakh is set to benefit only those who want to buy houses at tier II and III cities.
The allocation of `300 crore for implementing e-stamping facility in other states is a welcome measure.
The builders feel that finance minister has neglected the housing sector. They feel that there is a lot more to do to mitigate the problems of real estate segment.