Housing segment can look to turning the corner with this budget

The reduction in long term capital gains tax from 3 year to 2 years is expected to benefit those who invest in real estate as part of their asset allocation. Also, the indexation year being shifted from April 1,1981 to April 1, 2001 will make the long term investment benefit from more money in hand with less taxation. Although Chennai’s residential is driven by end users, a shorter turnaround time will stimulate investment in this sector from investors as well. The“Housing of All” by 2022, initiative will help property developers access funding of the project at much lower rates of interest. Majority of the development in this asset class happens outside the metropolitan areas of Chennai like the IT Corridor of OMR, GST Road, Mount Poonamallee Road & Poonamallee High Road. Coupled with interest subvention to home buyers, this segment is expected to benefit the most. — Sanjay Chugh, Founder, Skylines Property Consultants

With Infrastructure Status allotted to affordable housing segment, it would enable private players to be part of the Housing for All campaign, and give a major boost to the segment and provide more options for the middle and lower middle class aiming to buy their first homes. Infrastructure has been the primary focus in the budget and allocation of Rs. 3.96 lakh crore towards infrastructure development will also boost the economy. Rural housing gets boost too. Other incentives like one year tax exemption from notional rental income from unsold inventory and reduction of long term capital gains tax period from 3 to 2 years will be a much needed relief for the developers. It will help the real estate developers who are holding real estate inventory. Also, with the change in criteria from built-up area to carpet area, home buyers can look forward to correct sizes homes in the future. — Arun Kumar, MD, Casa Grande Pvt. Ltd

The government believes that the impact of demonetisation is transient. The increased liquidity in the banking system and the increase in the net of taxable income for people and corporates, has resulted in the government stipulating an aggressive fiscal deficit of 3.2% in 2017-18. Coming to the Real Estate sector, the moves including the reduction in the tenure of long-term capital gain tax from 3 years to 2 years, rationalisation of capital gains JDA agreement, infrastructure status to the affordable housing segment and most importantly the SOPS inter-alia, the increase of the size of the affordable housing unit and enhancing the universe for the 60sqm stipulation in the segment, are all positive steps for the real estate sector and will definitely help in giving the much needed push to the affordable housing segment. — Venkatesh G, Business Development & Chief Investment Officer – Shapoorji Paloonji Real Estate

The taxation on vacant residential property is likely to bring down the number of vacant housing units across the country by unlocking them for rental housing. The budget fine print indicates the biggest tax arbitrage via setting off loss from second home has now gone away. However the effect of this is not so positive for the individual buyer. Earlier an individual could buy a second home on mortgage and show a loss via differential between interest paid on mortgage minus rent received from the property. The loss could be adjusted against income from salary or other income. Now the adjustment has been restricted to Rs 2 lakh only. The provision is negative for real estate sector as it may discourage investment in second property to save tax. — Founder, Skylines Property Consultants Jayashree Kurup, Head of Content & Advisory, Magicbricks.com

The Budget missed out on giving any additional income tax incentives to firsttime home buyers or providing higher tax savings on housing loans and house insurance premiums. Nor did it raise house rent deduction limits. However, it did provide some direct tax relaxation to the lowest income earners, and gave some clarity on the designated beneficiaries under the Pradhan Mantri Awas Yojana. A new Credit Linked Subsidy Scheme for the middle-income group with a provision of Rs 1,000 crore in 2017-18 was announced. Also, extension of tenure of loans under the CLSS of Pradhan Mantri Awas Yojana was increased to 20 years from the existing 15 years. One crore houses are to be built by 2019 in rural India for the homeless etc. — Anuj Puri, Chairman & Country Head, JLL India