BENGALURU: Property developers in Bengaluru have welcomed the budget proposals to grant industry status to affordable housing projects and ease norms related to capital gains tax. They said it would help boost the sector which has been long under pressure.
Builders feel the lowering of tax for the salaried class, especially in the Rs 3-5 lakh per annum segment, will boost spending power and drive investment in real estate. The announcement of National Housing Bank refinancing individual loans of about Rs 20,000 crore in 201718 is likely to give a push to affordable housing.
“We were not looking at drastic measures to be taken, rather, simple, small steps, all working towards the goal of enhancing the real estate sector. I believe this has been done with this budget,“ Suresh Hari, secretary of industry body Credai Bengaluru, said. Prestige chairman Irfan Razack said that granting infrastructure status to affordable housing will give developers operating in this segment access more funds from banks.
Increasing the area of an affordable housing unit from 30 & 60 square metre built-up area to 30 & 60 square metre carpet area will provide an extra 25% to 30% more space in this category. “It’s a big boost to the common man and affordability,“ Brigade’s chief executive of residential segment Om Ahuja said.
“Extending the time horizon for project completion from 3 years to 5 years to avail tax benefits will encourage more developers to look at this segment seriously,“ Ahuja added.
Puravankara MD Ashish Puravankara has said that payment of capital gains by the landlord on joint development (JD) agreements in the year of completion was a welcome move. “This will enable real estate companies to pursue development without further infusion of capital in the acquisition,“ he said. Sobha managing director J C Sharma has said that the government has sent a clear message that it is keen to support the sector which has been in the doldrums.
“In return they want us to also focus on affordable housing which has been its priority,“ he said.
Shares of all the listed developers from Bengaluru, including Nitesh Estates, were up, with Prestige rising as much as 5.6%. Sobha and Puravankara shares rose about 2.6% each.
Credits ET Realty