From ET Realty
NEW DELHI: Government should do away with the dividend distribution tax (DDT) to promote REITs and give financial protection to home buyers for delay in project deliveries, real estate consultant JLL India said in its pre-Budget wishlist.
The government introduced the Real Estate Investment Trusts (REITs) aimed at attracting funds in a transparent manner into the real estate sector. The trust, which can be listed on stock exchanges, would help channelise both domestic and overseas investments into real estate.
“Despite the announcement last year, there has not been a single REIT (Real Estate Investment Trust) listing in India to date. The primary reason is the presence of DDT. While the government has worked towards removing other bottlenecks, DDT has remained a key pending issue,” JLL India Chairman and Country Head Anuj Puri said.
The government should do away with the DDT in the Budget 2016, he added.
“Until this vital change is made, REITs, which can almost single-handedly revive the Indian real estate sector, will remain pipped at the post. To aid the faster revival of the real estate sector as well as to provide a significant boost to the economy in general, the Budget must address this issue,” Puri said.
Last year, the government had given relief for REITs on the minimum alternate tax (MAT). It had said that MAT would be applicable on the real estate and infrastructure investment trusts only when there is actual transfer of their units.
JLL also sought financial protection from project delays to home buyers.
Instead of allowing home buyers tax benefits post-possession, JLL said the Union Budget should make a provision that allows these from the time they start paying interest on housing loans. This would will ease monetary burden considerably on home buyers.
“The Budget should pay specific heed to this pressing need. On purchase into an under-construction property, buyers can only claim tax benefits of Rs 2 lakh after possession if construction is completed within three years.
“The benefits reduce to Rs 30,000 if the builder delays construction beyond this – and they pay higher interest. First-time home buyers purchasing properties for self-use additionally pay rent,” JLL said.