NEW DELHI: Hailing Budget proposals, realty developers and consultants said the government’s move to give tax sops on home loans and investment trusts, and easing of FDI rules will boost housing demand and investment in the slowdown-hit real estate sector.
Country’s largest realty firm DLF Group Executive Director Rajeev Talwar said: “The finance minister must be complimented for presenting a very good budget that offers directional clarity and will surely kickstart the economy”.
Measures like hike in rebate on interest paid on home loans to Rs 2 lakh, increase in limit under Section 80C to Rs 1.5 lakh and a raise in personal income tax limit to Rs 2.5 lakh will surely spur people to invest in housing, he added.
Talwar also noted that the budget has ended the ambiguity on the tax status of REITS (Real Estate Investment Trusts), paving the way for introduction of this instrument that would attract global funds to invest in the sector.
Stating that the proposal of 100 smart cities is a big step towards urbanization, Talwar assured “DLF will surely be a contributor and a partner in this mega initiative”.
Tata Housing MD and CEO Brotin Banerjee said the budget has introduced proposals that would help kick-start investment in the real estate sector.
“The government’s move to provide necessary incentives to REIT’s and giving a tax pass-through status is a positive move as it will reduce the pressure on the banking system, avail fresh equity and attract long term finance from foreign as well as domestic sources,” Banerjee added.
Increasing the interest deduction to Rs 2 lakh would help more people to buy homes and this could trigger renewed interest in realty market, he said, adding that relaxation in FDI would boost foreign investment.
Unitech MD Sanjay Chandra said: “I am glad to see REITs becoming a reality in India finally. I hope SEBI will soon come out with detailed guidelines on REITs, so that realty companies can start taking benefit of this mode of financing.
“REITs will also hopefully lead to large scale participation from retail investor community in the commercial real estate space,” Chandra added.
Describing budget as “half glass full and half filled with hopes”, realtors apex body CREDAI Chairman Lalit Kumar Jain said it met with some expectations and left some out.
Jain welcomed the announcements on REIT and FDI but rued that infrastructure status to realty sector or industry status to housing were not accorded.
Industry body NAREDCO Chairman Naveen Raheja said change in FDI rules will help to get finance in small projects.
“Clarity on tax treatment and promotion of REITs will open up new source of capital for crunched real estate thereby filliping the growth of the so called slowed down sector”.
CBRE South Asia Chairman and Managing Director Anshuman Magazine said: “The biggest announcement for the realty sector was SEBI being directed to introduce REITs in India. We expect the entry of this much-awaited investment instrument to provide alternative funding channels to the realty sector.” -PTI
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