Finance Minister Arun Jaitley presented his fourth Budget today. Though, as expected rural expenditure and upliftment remained the overall theme, affordable housing dominated the real estate space in the budget. Almost every decision impacting real estate sector was related to affordable housing. Here are some salient points directly impacting the impacting the Indian property markets.
Infrastructure
- The combined spend on infrastructure is estimated at INR 3,96,135 crore.
- Out of this Highways alone will witness an inflow of INR 64000 crore.
Affordable Housing
- Affordable Housing getting an infrastructure status is a major reform for housing in India.
- Carpet Area and not built up area will be considered as a size parameter for low-cost houses. The basic size still remains 30-60 sq meters.
- Allocation for Pradhan Mantri Grameen Awaas Yojna hiked to INR 23000 crore.
- Builders will now be given 5 years to complete a project under affordable housing.
“The Housing sector stands to gain immensely from the Budget – PM Narendra Modi”
Taxation
- The time span for relief in capital gains tax arising on sale of a property has been reduced from 3 years to 2 years.
- Property developers entering into Joint Development Agreements, will get respite from taxes on unsold inventories in context to capital gains. This is because the tax would only be levied in the year in which a real estate project is completed.
Mortgage & Finance
- National Housing Bank will refinance individual loans worth INR 20,000 crore.
- Abolition of FIPB will liberalize FDI norms, giving a major cheer to Indian economy in general with better investment climate
- The ban on Cash transactions above INR 3 lacs.
Overall, the union budget turned out to be positive for Indian real estate, specifically the housing sector. However, the other aspects of real estate, like commercial property, hospitality, retail etc. were not impacted at all. The focus remained on the housing needs of the lower middle-class segment.
