BHUBANESWAR: The real estate sector which was pinning its hopes on the Budget for revival was left disappointed with no major incentives announced in the Budget to boost sluggish housing sales.
"Expectations were high from this year’s Budget as we expected reduction in interest rate for housing loan, interest subsidy and enhancement of loan to value and other such measures for revival of the sector. However, nothing really was announced," said Nishith Ranjan Nanda, president of Association for Odisha Real Estate Developers (AFORD).
Tax slab for income up to Rs 15 lakh may help middle class save a little more money but that alone is not sufficient for them to plan to buy a house.
The Budget has failed to address the issue of unsold inventory in the real estate sector which is continuing to pile up, Nanda said adding the only major benefit for house buyers is that Rs 3.5 lakh deduction on home loan interest will continue up to March 21, 2021.
Chairman of Confederation of Real Estate Developers’ Association of India (CREDAI), Odisha, DS Tripathy said the developers where hoping for more reduction in GST besides standardisation and reduction in Stamp Duty to revive the sector. "The GST in this sector needs to be reduced to 8 pc from the existing 12 per cent," he said.
Tripathy, however, said the extension of the affordable housing tax holiday period for another project year till March 2021 will motivate developers to construct more affordable housing to avail the full income tax exemption benefits.
The customer will also get an additional benefit of Rs 1.5 lakh on interest payment on home loan below Rs 45 lakh, he said and added that the decision will boost the realty sector and market sentiments further. General secretary of Federation of Odisha Apartments' Associations Bimalendu Pradhan said the major letdown in the Budget is that there is no clear road map for 4.5 lakh unsold houses in the country.
Besides, there is an immediate solution to address the present housing mess as the tax benefits on interest paid for a home loan is limited only to affordable housing.