‘Housing sector should get infrastructure status’
New Delhi- Real estate being beaten by decreasing demand owing to high interest rates and economic slowdown has demanded for infrastructure status for the housing sector in the Budget for 2013-14.
If given the infrastructure status, the sector would gain of tax benefits and easier flow of funds. At least the affordable housing sector should get this status, requested housing ministry.
Even the National Real Estate Development Council (Naredco) has expressed that the real estate sector must be given infrastructure status and rental housing should be made more attractive to address the shortage of houses.
According to the council, the deduction from rental income under Section 24(a) of the Income-Tax Act should be increased from 30 percent to 50 percent as this would promote rental housing. The deduction could be 100 per cent for women and senior citizens, keeping social requirements and empowerment of women in view.
Experts expect a raise in the income-tax exemption limit to Rs 3 lakh and a reduction in excise duty rates to put higher disposable income at the hands of the public. He further demanded that service tax be done away with in the housing sector.
Service tax should be zero for residential construction in order to encourage the buyers and increase the demand for residential units, said a renowned realtor.
The major factor affecting the housing demand is the tight monetary policy of the Reserve Bank of India (RBI), claim realtors. The RBI is not reducing interest rates although there is high pressure from past two years.
Recent report by Cushman and Wakefield states that the residential real estate market has witnessed a fall of 16 percent in 2012. And as per Knight Frank report, builders were doubtful cautious in launching new residential projects in India as the gap between a launch and the absorption numbers dropped to 32,000 units in 2012, compared with 82,000 and 94,000 units in 2010 and 2011, respectively.
An extension of an interest subsidy scheme with enhanced limit on housing is supposed to be given. Also there is a hope that the norms pertaining to external commercial borrowing (ECB) for low-cost housing would be relaxed. The government should look at development of special residential zones, said experts.
There is an interest subsidy scheme of one per cent on housing loans up to Rs 15 lakh, where the cost of a house does not exceed Rs 25 lakh for another year, has been included in the Budget 2012-13. The finance ministry had announced measures to address the shortage in low-income housing by allowing ECB for low-cost housing units and setting up of a credit guarantee trust fund.
Developers in the National Capital Region are currently expecting more towards ECB, which will carry on in 2013, said experts. Granting infrastructure status to affordable could also get loans at affordable rates. And once it’s a part of the infrastructure sector, four percent of bank loans should be reserved as priority loans for affordable housing.
Realty experts suggested that more than six months delay should not be considered as non-performing assets.
Click here for related forum discussion
Related Real Estate News:
House tax just one rupee per annum in Goa village panchayats
Central govt hikes financial aid for rural housing scheme
Home sales drop by 16 percent in 2012: Knight Frank report
affordable housing sector., external commercial borrowing, higher disposable income, housing demand, low cost housing units, Low-cost housing, low-income housing, National Real Estate Development Council, new residential projects, nfrastructure status for realty sector, Realty News, rental housing, Reserve Bank of India, Residential projects in India, special residential zones
[...] Click here for related forum discussion [...]
[...] ‘Housing sector should get infrastructure status’ [...]
[...] ‘Housing sector should get infrastructure status’ [...]
[...] ‘Housing sector should get infrastructure status’ [...]