Finance Minister Arun Jaitley’s budget has garnered positive reactions from the market at large if the Nifty & Sensex closing numbers are any indication.The real estate will be more affordable which in turn will prove to be a lucrative opportunity for investors.Here’s a quick recap:
- Affordable housing was given Infrastructure status which translates to higher investment in affordable housing. The renewed status will ensure financial institutions’ willingness to lend more to projects in the affordable housing segment would increase.This is in line with the Prime Minister ‘s vision of providing Housing for All by 2020. Giving an infrastructure tag to such projects would attract more investors.
- National Housing Bank will refinance individual loans worth Rs 20,000 crore in 2017-18. This will give a major push to affordable housing companies.
- The Government has also proposed 1 year tax exemption from notional rental income from unsold inventory. This would help especially those holding real estate inventory/ stock. This is a great move to providing tax relief to developers in the residential sector where the sales have significantly dropped post demonetisation move.
- Capital gains on Joint Development Agreement is to be taxed only when the project is completed. This would provide a great boost to unlocking land for development and reduce litigation.
- Better tax sops for promoters of affordable housing.
- The FM also announced that for joint development agreement signed for the development of a property, the liability to pay capital gains tax will arise in the year the project is completed.
- The Foreign Investment Promotion Board (FIPB) will cease to exist soon. To safeguard investors’ interests, a Bill will soon be formulated, the FM added.
- The government plans to introduce a common application form for registration, opening of bank and demat accounts and issue of PAN for foreign portfolio investors (FPIs).This is expected to “enhance operational flexibility and ease of access to Indian capital markets”.
Source: ET Realty
Tags: budget 2017, real estate
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