Realty firms expect Budget to boost affordable housing sector
Reeling under the credit crunch and slump in demand, realty firms and consultants expect the Budget to provide more incentives for affordable housing sector and encourage buyers by doubling exemption limit on interest paid on housing loans to Rs 3 lakh.delhi Updated: Jul 05, 2009 13:55 IST
Reeling under the credit crunch and slump in demand, realty firms and consultants expect the Budget to provide more incentives for affordable housing sector and encourage buyers by doubling exemption limit on interest paid on housing loans to Rs 3 lakh.
Developers hope that the Budget, to be presented tomorrow, will pay special attention to the affordable housing sector, besides availability of easy finance to the developers and home-loan borrowers.
"We are hopeful that the Budget will have 2-3 things for the realty sector. On the affordable housing, we think more tax incentives or rebates will be given," the head of Jones Lang LaSalle Meghraj Cairman and Country, which is the country's largest real estate consultant, Anuj Puri, told PTI.
The focus is likely to be on affordable housing and the government may reintroduce the section 80IB (10) of Income Tax Act, he added.
The section, which was in effect till March 31, 2007, allows 100 per cent exemption of income tax on housing projects with a maximum, built up area of 1,000 sq ft in Delhi and Mumbai, and 1,500 sq ft in other places.
"Interest rates for home loans should come down further ... Developers should also get easy finance for their projects," Puri said, adding that the limit for deduction of interest paid on housing loans is expected to be raised to Rs 3 lakh from the present Rs 1.5 lakh.
"Our main demand is to implement the section 80IB (10), which will obviously help in developing affordable housing in the country," industry body NAREDCO President Rohtas Goel said.
Developers are also asking for an industry status to the housing sector and extending the definition of infrastructure to include group housing and integrated townships under its fold.
"We are also requesting for extending the time-limit for one time debt restructuring till March 2011 from June this year," Goel, who is also the Chairman and Managing Director of Omaxe, said.
Some of the other demands of NAREDCO include creating a dedicated affordable housing fund on the lines of the infrastructure fund; lifting restrictions on external commercial borrowings by the housing sector and 50 per cent tax incentive for certified green buildings.
"Impetus is required to be given to the affordable housing sector," industry chamber FICCI said, adding that the government should also provide relief to the middle class families.