To boost the investment coming via the NRI route, the taxation has been simplified which may incentivize the overseas Indians to invest in India
India’s real estate sector which was engulfed by a global pandemic is now back on road to recovery. With economic activities gearing up, key announcements in the union budget have raised hopes for this sector.
Industry leaders are lauding and welcoming decisions taken by Finance Minister Nirmala Sitharaman. Eminent experts opine that major budget announcements like tax exemptions on affordable housing projects, debt financing by foreign portfolio investors (FPIs) in real estate investment trusts (REITs) and infrastructure investment trusts (InvITs), better connectivity will bring back confidence among investors and homebuyers, reviving trust, growth and investments in this emerging sector. Great steps to ensure country’s road to recovery
“The budget is a reflection of the government’s efforts to re-instill confidence and energy in India’s economy for a ‘V-shaped’ recovery. The six pillars of the budget (health, physical, financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D and minimum government and maximum governance), as outlined by the FM, will give a direction to the country’s economy, which suffered a huge jolt due to the pandemic. Tax reliefs and announcement of one year’s tax holiday will bring back confidence in home-buyers and will boost the affordable housing sector. Change in double taxation on NRIs will also act as a catalyst for investment in this sector. The country is on its road to recovery and this budget ensures the same” said Amarjit Bakshi, CMD, Central Park.
Affordable housing to boost in state capitals and tier-2, 3 cities – The government has tried to push its ambitious target of housing for all.
“State capitals and tier-2, 3 cities will benefit immensely from the government’s focus on sectors like roads and highways, ports, power, urban infrastructure, railways. Add to it, the affordable housing boost, by extending tax holiday for such projects by one year, extending by one year the deadline for first-time homebuyers to avail additional Rs 1,50,000 interest deduction on home loan, and tax exemption for affordable rental housing will further boost demand for housing in these cities,” said Mohit Goel, CEO, Omaxe Ltd.
The Union Budget 2021 is largely focused on healthcare and infrastructure, which will have a ripple effect on the development in the other sectors including real estate, said Aditya Kushwaha, CEO and Director, Axis Ecorp.
“We welcome the first digital budget presented by the Finance Minister. The budget is largely focussed on healthcare and infrastructure, which will have a ripple effect on the development in the other sectors including real estate,” said Kushwaha. The Finance Minister has also given special importance to human capital. Steps taken in this direction in conjunction with growth in infrastructure will lead to an increase in the disposable income of people which could bring a good scope for investment in real estate, he added.
“In the Annual budget for 2021 too, we can see the Government’s focus on affordable housing. The deduction on payment of interest for affordable housing has been extended by a year. This move will improve customer buying behavior,” Kushwaha stated.
At the same time, to boost the investment coming via the NRI route, the taxation has been simplified which will incentivize NRIs to invest in our country as they will get a tax rebate on the rental income. This move will also give a boost to holiday homes and commercial real estate in the country, he further said.
“Furthermore, there have been relaxations offered in real estate transactions, capital gains, business profits, and rental income which in turn will uplift the real estate sector,” said Kushwaha.
Meanwhile, Farshid Cooper, MD, Spenta Corporation said, a major impetus to the infrastructure and introduction of DFI or Development Financial Institution worth INR 20,000 crore is a fillip to not just to the respective sectors but also to the aligned segments such as housing.
“The pandemic had significantly impacted the construction of major infrastructure projects and stalled the housing construction for a considerable amount of time. The DFI will help fast-track the infra projects in major cities paving way for the growth of the housing sector as well. Additionally, an extension of tax exemption available for the purchase of affordable houses and affordable rental housing projects will boost the real estate sector in major cities and Tier II and III cities as well,” he added.
Savills India, CEO, Anurag Mathur has also lauded the key features of the Union Budget-2021 stating, the budget has reaffirmed the government’s commitment to bring back the country on a road of recovery through focused impetus on infrastructure, healthcare, inclusive development, innovation, and robust governance.