For Boost Real Estate Sector Govt. Promote Affordable Homes
Affordable Home for Everyone
- Institutional Status to Affordable Housing:- Govt has awarded Institutional status to Affordable Housing with which more banks are interested to lend loans to developers for their affordable housing projects further encouraging different companies to venture into affordable housing. This will result into a progress in the said sector. Institutional status also ensures to simplify approval process for affordable projects, create clear guidelines and increased transparency in the segment that allows the country to realize the dream of “housing for all by 2022”
- Increase in the project completion time line. Project completion timelines for affordable residential projects have now been increased to 5 years, which comes as a relief to developers of such housing as it will allow them more time to sell their housing projects. Obviously, this has a direct potential correlation to employment generation and therefore boost demand for housing as it will encourage the builders
- Boost to Low cost housing: The criteria for low cost affordable housing has been changed from built-up area of 30 / 60 sq meters to carpet area of 30/60 sq meters, thus making the low cost – affordable housing segment more lucrative for the builders and also making the segment more attractive for the buyers. With the change in criteria from built-up area to carpet area, the purchasers get more spacious homes and the builder is able to market the property to a larger segment of buyers.
- Reduction in Income tax rate for basic slab: The government has reduced the income tax rate in the tax slab of those having income of 2.5 to 5 lac from 10 to 5% respectively. This will help the people to save lot of money which can be saved and increased the purchasing power of customer thus increase in the number of inventories being sold followed by the incentives and reduced interest rates likely to promote thrust in affordable housing.
- Taxation of Capital Gains of Joint Development Agreement: Budget 2017 also bring about changes in the ongoing practice by clarifying that the landowner who entered into joint development agreement and develop the location will be given capital gains on completion of the project. This is a major change which is much required to avoid litigation within the department.
- Change in time period for calculation of notional rental on unsold stock: The government will charge the tax on the unsold property only after one year of the completion of the project which will bring a relief to the developers and also enable them to get more time in promoting their sales units.