The Union Budget 2016-2017 has been a balanced one for the whole country and will surely work really well in parity with the current government. With infrastructure and investment being amongst the nine pillars to transform India, the budget has built a road for real estate development. With the first time home buyers getting an additional exemption of Rs 50,000 for housing loans up to 35 lacks, provided the value of the home doesn’t exceed 60 lacks ; the affordable housing sector will get a big boost. Like I had shared earlier as well, the real estate sector expected some major inclusions from budget to help uplift the real estate market and simultaneously balance the sentiment a little. The real estate market was in need of new home buyers to bring in the lost cheer and I feel that the taxation measures for promoting affordable housing and increasing activities in the housing sector were the need of the hour that has been addressed. The development of the new credit rating system for infrastructure will also be of great benefit for the developers.
Moreover, the budget has proposed outlay of Rs. 2.21 lakh crore on infrastructure development which will further boost the real estate sector as the development of roads and highways automatically increases the demands for the commercial, retail and residential real estate. Also, with new jobs being created we expect the demand for housing to increase substantially. It was very aptly quoted by Mr. Jaitely that the domestic demand has to be increased and the government has to prioritise its sectors to bring in the macro-economic stability. Announcements like exemption from service tax on construction of affordable houses up to 60 sq metres under any scheme including the PPP scheme, 100% tax deduction for companies building houses up to 30sq. metres in four metro cities approved during June 2016 to March 2019 which are completed within 3 years of the approval etc will boost and help in the development of real estate market. The policy formation phase of Real Estate has moved towards the execution level. In the past, the market was a little slow due to which the home buyers as well as realtors have been paying a heavy price. To bring back this lost confidence, the current announcements for first home buyers and tax exemptions are expected to do wonders. All in all, Budget has been up to the expectations for real estate market and will give light to the dark areas of unorganized sector.