Realtors hope for easier home loan regime

Perched in the middle of an unprecedented downturn in the sector, the real estate sector wants the budget to bring cheaper home loans, more income tax rebates on interest payment and a boost to infrastructure spending. Lalatendu Mishra & Ruchi Hajela report.

Perched in the middle of an unprecedented downturn in the sector, the real estate sector wants the budget to bring cheaper home loans, more income tax rebates on interest payment and a boost to infrastructure spending.

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“Government must provide incentives to developers to make investment in real estate. All housing loans should be made available at interest rate of 5 to 7 per cent and weaker sections should get at 3 per cent,” said Pravin Doshi, president, Maharashtra Chamber of Housing Industry (MCHI) in a pre-budget memorandum.

Sanjay Chandra, managing director of Unitech Ltd, said he expected easy refinance for mortgage lenders.

Though property prices have corrected by 30 to 40 per cent, the buyers need much more to flock to the market, say developers.

“The government must increase the income tax exemption slab for interest payment on home loans from Rs 1.5 lakh to Rs 3 lakh and hike standard deduction on rental housing from 30 per cent to 50 per cent,” said Niranjan Hiranandani, managing director, Hiranandani Constructions.

“Housing must be treated as infrastructure. For construction of houses agricultural land has to be acquired by the developer and it takes years for conversion. In the meantime the developer pays wealth tax. We want urban land held as ‘stock-in-trade’ be totally exempted from wealth tax without specifying any period,” said industry giant DLF in its memorandum.

Anshuman Magazine, managing director for consulting firm CB Richard Ellis said he expected the government to strengthen the Jawaharlal Nehru National Urban Renewal Mission and also increase the cap on cheap priority sector loan to Rs. 30 lakh from Rs 20 lakh.