Union budget: Tax incentives not enough to boost realty in Mumbai, say experts | mumbai news | Hindustan Times
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Union budget: Tax incentives not enough to boost realty in Mumbai, say experts

mumbai Updated: Feb 02, 2017 09:43 IST
Naresh Kamath
Pradhan Mantri Awas Yojana

Experts said that adequate attention was not paid to prospective buyers who were shying away from the market.(Hindustan Times)

The Union budget may have given infrastructure status to the real estate sector along with a couple of tax incentives but these are unlikely to impact the Mumbai realty market in a big way.

According to both builders and experts, these incentives are unlikely to provide a boost to the realty sector, especially when it is facing a massive slowdown.

Sukhraj Nahar, chairman and managing director of Nahar Group said that the budget does not provide any respite to the buyers. “We had anticipated that the budget would have measures to correct market drawbacks as a whole. It, however, ignored the consumers belonging to the middle class that forms the largest segment of real estate buyers,” said Nahar. He added, “This has left little room for any property in this region to be within the reach of the common man.”

He said that the criteria of houses to be built with a carpet area of 30 square metres, was not practical as people living in metros prefer bigger houses.

Finance minister Arun Jaitley had in his speech stressed that the Union government was committed to providing affordable housing schemes. He changed the criteria for affordable housing from built-up area of 30 and 60 square metres to carpet area of 30 and 60 square metres.

Jaitley also declared that developers who would be roped in for constructing affordable houses would be exempted from tax on their profit for five years.

But experts said that adequate attention was not paid to prospective buyers who were shying away from the market. “The middle class tax payers, who were the ones badly hit during demonetisation, have been ignored in this budget,” said Amit Wadhwani, managing director of Sai estate consultants, a major consultancy firm in the city. He added, “There is no relief in service tax or the value added tax, which tends to increase the builders’ expenditure.”

The realty sector is, however, enthused as the affordable segment has been given the infrastructure status. Now, developers can access foreign funds at a cheaper rate and also be a priority consumer for Indian banks.

The Union finance minister also said that the government plans to build 1 crore houses for the poor by 2019 along with the allocation of Rs23,000 crore for Pradhan Mantri Awas Yojana to fulfill its agenda of “Housing for All” mission by 2022.”

Also read: Union budget: Jaitley brings no good news for Mumbai’s 75 lakh commuters