The union budget has announced several positive measures for the real estate sector well aligned with the government’s and the industry’s target of ‘Homes For All by 2022’. The government’s renewed focus towards infrastructure by completing existing 1 Lakh Km of roadways and adding another lakh kilometers give impetus to housing. The aim of creating 4 Crore rural and 2 Crore urban homes amplifies the governments priority and commitment towards the housing industry.
In order to facilitate the vision the budget has encouraged investments through Alternate Investment fund thereby doing away with other instruments such as Foreign Portfolio Investors (FPI) and Foreign Direct Investment (FDI) for such investments. The budget has proposed an overhaul of capital gains taxes to pave the way for the listing of Real Estate Investment Trusts (REITs) in the country; this certainly will be a game changer for the industry. Having said that, the service tax rate is being increased from 12% plus Education Cesses to 14% which will further escalate prices and will be counter-productive to mass and affordable housing.
