Pre-budget Quote from The Baya Company and Nirvana Realty
The Baya Company Quote:
By Rohit Kharche, Director of The Baya Company
Quote: Real Estate developers today are extensively focused on meeting the specific needs of younger buyers as the average age of the city’s home buyers decreases. One of those requirements is a price that is just right. Additional value can be provided to homebuyers by reducing the amount of taxes paid. The GST reduction/exemption for properties under construction would give a huge boost not only to the real estate sector but also to the homebuyer. This allows larger units to be provided at the same price point, thereby adding value.
In metropolitan areas, various tax benefits are available to developers and homebuyers when investing in affordable housing – units priced at less than 45 lac and up to 60 square meters. A slight revision to provide such benefits for units up to 60 square meters and up to Rs. 1 crore will immensely benefit the homebuyer and developer, and enable a steady supply of affordable housing units in metropolitan areas. Long awaited industry status for the real estate industry will directly make credit available to developers on better terms. Since commodity prices have skyrocketed in the recent past any GST reduction of such prices would directly benefit the home buyer as developers currently have no choice but to increase prices due to scarcity and rising commodity prices.
Nirvana Realty Quote:
By Punit Agarwal, M.D & C.E.O of Nirvana Realty
Quote: Real estate contributes around 8% to the overall GDP of the country. Acknowledging such a strong pillar of the economy, the government must foster policy reforms to accelerate growth in the realty sector.
As the industry is slowly and steadily getting back on track after two consecutive waves of Covid-19 pandemic, it is looking at a robust housing demand revival in 2022. Here, the Union Budget 2022 can play a supportive and enabling role. The sector is looking at a few tax relaxations:
1. There should be a revision in ₹2 lakh Interest rebate under Income Tax Section 24, as in the aftermath of the pandemic, as disposable income has reduced due inflation and salary cuts.
2. Raw material prices have increased by 30% in the last 2 years which is eating away the margin for low cost housing sector, Input credit of GST should be allowed to overcome these losses
Besides this, several big companies like Twitter, Tata Steel, etc have completely switched to remote working modes. The work-from-home culture has surged the demand for Holiday Homes. Many Holiday Home developers are actually boosting rural tourism near the main cities, helping in generating stable income for local laborers & raising the standard of living.
It would be best if the Finance Minister considers Waivers or reductions on GSTs on raw materials such as cement, steel, etc. as well as concession on stamp duty or provides special allowances to promote such developers who can impact travel & tourism opportunities for local welfare in the rural areas.