Expectations from Union Budget 2016

Like all sectors, the realty segment is hopeful about this year’s Union Budget and expects positive changes like service tax restructure relaxation, single window clearance, long pending industry status that may bring in cheer for both home buyers and developers. Our Managing Directors – Mr. David Walker & Mr. Vineet Relia share their expectations from Union Budget 2016.

Mr. David Walker, Managing Director, SARE Homes

We are keen to see the fiscal deficit target met in the medium term as this will enable the RBI to reduce interest rates – a key element in the cost of housing. We would really like to see the Real Estate Bill put through as it will bring back confidence of home buyers. Further, money paid in EDC charges to local authorities should be escrowed and dedicated towards the development of roads, power and electrification of townships. Tax deductibility for EMIs which is limited to Rs. 2 lakhs should be doubled to Rs. 4 lakhs, providing more relief to consumers. There is an urgent need to sort out the issue of double taxation relating to REITs, which has the potential to bring about $15 billion, providing a good boost to real estate. We also look forward to simplification of taxation via the GST legislation, and hopefully, also having a lower average rate of tax. Industry status to the real estate sector is another factor we’re looking forward to in this budget.

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Mr.Vineet Relia, Managing Director, SARE Homes

My primary expectation from this year’s budget is lowering of interest rates because it is an essential element from both consumer and industry perspective. If the government really wants to make ‘Housing for All’ a reality, it will have to come out with some kind of subsidies and tax reliefs or incentives for the industry to create more affordable housing options. It is important that real estate should be accorded industry status and incentives provided for the infrastructure sector should be passed on to the real estate industry. Moving forward, as the infrastructure story picks up, it will be very important that real estate also piggybacks, but for that we need the government to extend similar incentives such as lower interest rates to the real estate industry.

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