Budget fails to cheer up realty sector in Mumbai

Though the sector was awaiting various sops like grant of industry status, waiver of Goods and Service Tax (GST) on under-construction projects, tax breaks, the Budget did not bring any such relief.

The Union budget has failed to bring cheer to the real estate sector, which is reeling under slowdown especially after Covid-19 lockdown, in Mumbai region. Though the sector was awaiting various sops like grant of industry status, waiver of Goods and Service Tax (GST) on under-construction projects, tax breaks, the Budget did not bring any such relief.

The Budget did not meet the sector’s expectation of waiver in GST on under-construction flats. (FILE)

Finance minister Nirmala Sitharaman extended additional deduction of interest amounting to ₹1.5 lakh taken for affordable units by another year. Similarly, the tax holiday for builders constructing affordable houses has also been extended by one year. Both these measures were also announced last year.

According to the Builders Association of India (BAI), there was hardly anything in the Budget for Mumbai. “There is hardly any apartment within Mumbai limits costing less than ₹45 lakh, which is specified as affordable house. So the buyer as well as builder got no benefit from this Budget,” said Anand Gupta, chairperson (Housing and RERA committee), BAI. He said the sector was expecting waiver in GST on under-construction flats. “People prefer to buy readymade flats rather than invest in under-construction ones; hence builders are chocked of funds,” he said.

Real estate experts said it was just status quo from the Central government. “The market needed impetus from the government. They should have allowed the incentive to be passed for houses up to ₹1 crore instead of the present ₹45 lakh. The additional deduction of interest should have been extended to at least ₹8 lakh per annum as ₹1.5 lakh is not very attractive. This would have boosted the sales considerably,” said Pankaj Kapoor, managing director, Liases Foras, a real estate research firm.

The real estate sector is in slowdown mode as there was very less sales even before the Covid-19 pandemic, and the lockdown only aggravated matters. In the past two months, there has been activity due to various measures taken by the state government such as reduction of stamp duty.