With finance minister Arun Jaitley clarifying in the Budget that land owners will have to pay capital gains tax at the time of completion of a housing project, more housing launches are expected through this route.
Tata Housing Development Co Ltd, which pioneered the joint development model, is hoping to launch at least three projects this year, along with multiple phases in its current projects. Godrej Properties is also evaluating opportunities in the segment.
The recent budget proposal on JDA will help minimise issues land owners face while paying capital gains tax in the year of transfer. According to the new proposal, for an individual or Hindu Undivided Family (HUF) entering into an agreement for the development of a project, the capital gains shall be chargeable based on the stamp duty valuation.
“This move will help bring more land owners to partner with developers like us, thereby leading to more projects under the JDA route in the coming years,” says Brotin Banerjee, managing director and chief executive, Tata Housing. “This step will improve land transactions, bring in more supply of land into the property market and encourage more private additional land owners to partner with branded developers.”
Tata Value Homes Limited, a 100% subsidiary of Tata Housing, exclusively focuses on the value and affordable housing segment.
“We expect to launch at least three projects this year, along with multiple phases in our current projects,” he adds.
Terming the budget proposal as a “positive development”, Mohit Malhotra, executive director, Godrej Properties Ltd, said the company was evaluating opportunities through this route.