Touted as one of the most important budgets in recent times, expectations from Finance Minister Nirmala Sitharaman’s budget 2021 are flying high.
The dynamics of the real estate sector and its stakeholders witnessed a significant impact due to the covid-19 pandemic; however, the industry experts expects that the Union Budget 2021 would pave the way for opportunity and recovery.
Both the developers and buyers hope that the Budget 2021 will introduce reforms like tax sops and correction in prices which will further benefit and stabilise the industry.
The Economic Survey 2020, presented by FM on Friday pegged the GDP growth at 11 per cent in FY22.
Budget includes detailed statement of the estimated revenues and expenditures to be incurred by the government in a particular fiscal year.
Following are the various measure industry expects:
Circle rates
For the real estate sector the 20% deviation from the circle rates announced by the finance minister last year until June 2021 for homes costing upto Rs 2 crore, should not be time bound and needs to be extended for all real estate asset classes. The same will allow developers to offload the massive build-up of unsold inventory costing more than Rs 2 crore, says Kaushal Agarwal, chairman, Guardians Real Estate Advisory
Stamp duty for land purchase in affordable housing should be reduced or removed for next few years to promote the launch of such homes” says Pradeep Aggarwal, founder & chairman, Signature Global Group.
GST
The industry has been requesting for a GST removal on under construction homes to bring it on parity with ready homes which have no GST levy, says Amit Goyal, CEO, India Sotheby’s International Realty.
Ashok Mohanani, president, NAREDCO Maharashtra on the other hand look forward to re-introduction of GST with input tax credit on under-construction properties which will generate the demand among homebuyers.
The government may accede to industry’s demand of allowing set off of GST paid on input materials during the construction phase against rent and other income from property upon completion. The lack of input credit is currently seen as a dual tax levy on asset owning commercial real estate developers that rely on leasing or rentals,” adds Vivek Chandy, joint managing partner, J Sagar Associates.
Since the implementation of GST on transfer of development rights (TDR) is being interpreted for application of GST on transfer of right to develop the land. Due to this amendments, most of the projects either residential or commercial has reduced significantly. During this budget if there is a relaxation on GST for joint development transaction on T.D.R, it will be a huge benchmark for developers to take up projects for development,” says Bijay Agarwal, MD, Salarpuria Sattva.