Every year the union budget is presented amidst much buzz and excitement and this year, it was no different – despite Team India’s stellar showing in the ICC World Cup.
For the last few years, the real estate industry in the country has been beset by a number of woes – from poor demand to government regulations to the much-talked about GST.
So, will this year’s budget make the industry smile? Let’s take a look:
Affordable homes get more affordable.
One of the most significant features of this year’s budget is the deduction of upto Rs. 150000 on interest on loans borrowed under affordable housing. On a loan of 15 years, home buyers can save upto Rs. 7 lakh – which is a considerable amount.
The 2019 budget laid a huge emphasis on development of infrastructure – this will see the emergence of new satellite cities and new land parcels and housing projects.
RBI takes over from NHB.
Housing finance in the country will now be managed by the Reserve Bank of India – experts believe that this will go a long way in eradicating the liquidity crunch.
Replacing tenancy law.
The current budget proposed several reforms and replacement of the current rental law. This should boost rental housing and attract investors who are looking for rental income.
This budget plans to introduce 5% TDS on all payments made by individuals to contractors or professionals, in excess of Rs 50 lakhs a year. As of now, individuals or Hindu Undivided Family (HUF) are not required to deduct tax at source to deduct tax at source, on payments made for personal use.
While the budget has had some good news, some of the real estate sector’s expectations were not addressed. They include:
The long-standing demand of single window clearance was not looked into.
Industry status has not been granted to the sector yet again.
To sum up, experts in the sector believe that the 2019 budget is a balanced one. The commercial segment is expected to prosper with the expected infusion of liquidity by private equity funds.