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India
Union Budget 2016 brings cheer to the realty sector
09 Mar 2016, 03:30 pm
Kolkata, Mar 9 (NITN) The Union Budget presented by finance minister Arun Jaitley on Feb 29 offered some good news for home buyers and the real estate sector—viz. incentives for first-time home buyers, making affordable housing more viable and removing dividend distribution tax (DDT) on real estate investment trusts (REITs).
However, some experts have pointed out that the deal for the realty sector could have been sweetened further by granting industry and infrastructure status to the realty sector, something that the sector has been demanding for quite some time now.
The proposal to allow an additional deduction of Rs 50,000 per annum—on interest for loans up to Rs 35 lakh sanctioned during the next financial year, provided the value of the house does not exceed Rs 50 lakh—for first home buyers is good news for those who have been waiting to buy a home but have been held back because of lack of incentives.
According to realty sector experts, this tax benefit is an attractive option for people residing in tier II and tier III cities.
Primarc Realty has recently pioneered the concept of environment-friendly Green buildings across MIG and HIG segments in West Bengal, with its flagship project Astitva being pre-certified as the first GOLD-rated residential building in West Bengal. It has over 4 million sq. ft. of residential projects under development.
To make housing more affordable for everyone, especially the middle and lower income group, the budget has proposed 100% deduction for profits to those undertaking housing projects for flat up to 30 sq.m. in the four metro cities and 60 sq.m. in other cities, approved between June 2016 and March 2019, and completed within three years of approval.
Realty experts believe that exempting the Real Estate Investment Trusts (REITs) from dividend distribution tax (DDT) is a promising move.
REITs are listed entities that invest in leased office and retail assets, thus allowing developers to raise funds by selling completed buildings to investors and listing them as a trust.
The realty sector, which had become subdued over the recent months, is looking upon the budget proposals as a good sign for the market to rise again, especially from demand for new housing.
Image: A proposed residential complex on E M Bypass/Primarc
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