‘Housing for all' — a sub text in the finance minister’s budget speech, promises to boost the housing sector that has been dormant in recent years.
A prominent measure is the proposal to increase the deduction limit for interest on home-loans from Rs 1.5 lakh to Rs 2 lakh, for self-occupied houses.
Arun Jaitley noted that the high cost of financing makes housing an area of concern for middle and lower middle class, adding that the government is committed to bring housing for all by 2022.
“For this purpose, I intend to extend additional tax incentive on home loans to encourage people, especially the young, to own houses,” he said.
To provide impetus to low-cost housing projects, any foreign direct investment in low-cost and affordable housing will have to commit at least 30% of the total project cost. They will get an exemption from minimum built up area and capitalisation requirements, with a three year lock-in condition, he said.
The budget unveiled a “mission on low-cost affordable housing” that will be anchored in the National Housing Bank (NHB) for which Rs 4,000 crore has been allocated to NHB. Jaitley also pushed for rural housing with an increase in allocation Rs 8,000 crore for NHB in 2014-15.
This will further benefit a large percentage of rural population who have availed credit through Rural Housing Fund. “I propose to increase allocations for the year 2014-15 to Rs 8,000 crore for NHB with a view to expand and continue to support rural housing,” Jaitley said.