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Pune reacts to Union budget: Necessary stimulus not provided to real estate sector
The move to provide more money in the hands of the taxpayers and elimination of the dividend distribution tax are welcome steps
Finance minister Nirmala Sitharaman on Saturday announced the budget for 2020 – 21.
-Tax holiday for affordable housing extended by a year
-Rs 100 lakh crore would be invested on infrastructure over the next five years
-Concession to real estate transactions
-No major boost for the sector
Quotes
The move to provide more money in the hands of the taxpayers and elimination of the dividend distribution tax are welcome steps. The government has continued its stated path of removal of exemptions and deductions and as a result, has not provided the necessary stimulus that is needed to boost the real estate sector. As a result, the sector will see a slow recovery with more pain for many homebuyers and developers.
Rohit Gera, MD, Gera Developments
Budget 2020 has not been encouraging for the Indian real estate sector which needs immediate attention from the government. No sector specific measures were announced for real estate and as an industry we expected more bolder steps from the government to revive the ailing sector such as providing more liquidity for the sector, onetime restructuring of loans, and tax deductions on home loans to give impetus to buyer sentiment. Unfortunately, none of these issues have been addressed, except providing tax holiday for one more year which will not lead to any meaningful boost to consumption.
Satish Magar, president, Credai (Confederation of real estate developers association of India) national
The announcement made by the finance minister for bringing relief to NBFCs (non-banking financial company) will prove to be helpful in addressing the liquidity situation in the real estate industry. This is further expected to improve sentiments among the financial institutions and credit options for big and small developers. The government further renewed its commitment to promote the housing sector and extended the tax relief up to Rs 1.5 lakh on loans taken under affordable housing schemes. This is aptly matched by the tax holiday announced on profits made by developers involving affordable housing projects till March 2021.
Anshuman Magazine, Chairman and CEO - India, South East Asia, Middle East and Africa, CBRE
The budget was disappointing as there is no stimulus for growth and substantial provisions for the real estate and even for luxury or affordable housing. There are some small provisions, which we’ll have to study. The MSME's with turnover of Rs 1 crore were required to be audited but now, level for audit has been increased to Rs 5 crore. However, small companies may benefit in the procedure, but taxes have not been reduced so it won’t make much of a difference. Extension of period for approval of unaffordable houses under 80IB by one year will benefit to add more affordable housing stock.
Suhas Merchant, president, Credai-Pune Metro
The reduction of taxes for the potential middle class homebuyers increases the consumption in the market. However, we’ll have to wait and see the impact of the changed tax slabs for the taxpayers. Also, instead of the Dividend Distribution Tax (DDT), dividend will be taxed at the hands of investor individuals, which will not make much difference as their net savings may not increase much.
Shrikant Paranjpe, former president, Credai-Pune Metro
The primary analysis of the budget leaves us in a confused state of mind. Though the budget provisions appear to be farmer and middle-class friendly, is it really going to leave them with higher disposable income to spend? For the real estate sector, it is one more lost opportunity, in fact some tax provisions announced may negatively impact the market movement.
Sachin Kulkarni, MD, Vastushodh Projects
