What Real Estate Sector Expecting from Union Budget 2019

After the Interim Budget of February 2019, people are expecting a number of announcements from the Union Budget 2019 that is going to be held on 5th July 2019 by Finance Minister Nirmala Sitharaman. A common man always hopes that the Union Budget will have announcements that will impact their lives positively by improving their income and helping them to get jobs. In a similar fashion, the real estate sector too hopes that the upcoming budget will ease their major problems and encourage industry growth.

Below are the few major expectations of the industry:

Indian real estate industry, which is facing the pressure of liquidity crisis and slip in homebuyer’s confidence, expecting that the Narendra Modi-led NDA government will continue to come up with reforms and at the same time address the demands of real estate sector to reduce their difficulties.

To a great extent, Indian Real estate Developers failed to see much of the promised during the entire tenure of Narendra Modi-led NDA government that lasted from 2014 to 2019. All the reformatory changes initiated by the government earlier were for long-term benefits for the realty sector these include RERA, GST, the insolvency code, Benami Property Act, etc.

Real estate developers want the Modi government’s attention in deduction on the principal repayment of housing loans, REIT, affordable housing and most importantly liquidity crisis.

The Central Bank and government have taken significant steps to ease the pressure in the real estate sector by executing 3-successive repo rate cuts and justifying the Goods and Service Tax (GST) regime.

Many are expecting that the government will announce more gifts for first-time homebuyers and address policies to support affordable housing. The Credit Linked Subsidy Scheme (CLSS), which has a deadline of 31st March 2020, may get a further extension, and the tax benefits on home loans may be increased for the first time home buyers.

Apart from that, many home buyers are also expecting a piece of news for the addition of stamp duty into goods and services tax ambit. If this addition happens, lead to more savings for the homebuyers who currently need to pay two taxes individually, as a result, it increases their expenses.

The real estate sector is also expecting more relaxation in the GST rates. People have recommended to cut the corporate tax and increase the SEZ program. There is worry that if the tax incentive for SEZs is removed or switched, it could seriously knock the job creation capacity of the sector.

It further expecting the government to make easier ECB (External Commercial Borrowing) rules to assure a constant inflow of capital from foreign investors. Furthermore, the introduction of housing bonds, giving special status to HFCs (housing finance companies), according to that the banking sector will further help in providing the much-needed incentive to the housing sector across all businesses.

At the present time, there are limitations on tax benefits, if the seller of a residential property makes the sales returns for buying a commercial property. Real estate analysts are expecting that the government will take the action in this regard to allow the use of sale gains of residential property to purchase commercial property.

The Finance Minister Nirmala Sitharaman should also concentrate on an integrated plan for infrastructure and housing development, in the external or peripheral locations and tier-2 and tier-3 cities. Boosting infrastructure sector will not only benefit the real estate sector but also it will help other industries and will create large scale employment that will be a major boost for the Indian economy.