Developers from the city have expressed what they want the government to do in the union budget 2018. For the first time, it appears that developers are speaking for the home buyers, but here’s a twist.
Almost all developers and housing experts have asked for tax benefits for home buyer, because they feel if tax benefits are provided to the home buyer they will purchase a flat and help easing down the slowdown in the real estate market. What makes it different, is that mostly developers always seek benefits in budget for the industry but rarely speak for home buyers. This time all have given prominence to home buyers in their demands.
Mayur Shah, the president of CREDIA-MCHI, apex real estate body of Mumbai said, under Section 24 (b) for deduction of housing loan interest, the interest in respect of first self-occupied property should be allowed without any limit. Alternatively, the limit for deduction of interest should be increased to Rs 10,00,000 in respect of the self-occupied property.
Such exemptions developer believe will fuel a demand for housing. Explaining that how this will benefit the home buyer but above this the real estate industry, Shailesh Puranik, MD Puranik Builder said, “To begin with there should be no constraints and allowance must be given on the entire interest of housing loan as a deduction for taxation purpose which will again fuel demand for housing. We also expect that the Housing loss set-off limit should be increased from Rs.2 lakhs. The Budget 2018 should provide more incentives for the first time home buyers and developers who have been reeling the burden of RERA and general slowdown last year. It would be helpful if additional limit is set for the principal amount of the home loan, as usually this limit of Rs 1.50 lakhs under 80C which gets exhausted under regular investments like PPF, FDs, EPF, insurance premium and much more. Considering the slowdown witnessed in the real estate market the above recommendation can help the sector to gain some momentum and will reap higher growth prospects for builders as well as better returns for the end consumers.” Said Shailesh Puranik, MD, Puranik Builders, Pvt. Ltd.
Even experts from real estate industry are rooting for tax exemption for home buyers to give the real estate industry a boost. Ramesh Nair, CEO and Country Head, JLL India, an international real estate consultancy firm said, “The current provision is for additional tax deduction of up to Rs 50,000 per financial year under section 80EE of the Income Tax Act. The bracket should be increased up to 1 Lakh to incentivize first-time home buyers. This deduction is over and above the Rs 2 lakh limit under section 24 of the Income Tax Act.”
To incentivise home buyers, NAREDCO, another real estate body has suggested an increase in cap of interest paid on home loan, by home buyers, from Rs. 2 lakh to Rs. 3 lakh. NAREDCO Chairman Rajeev Talwar said “We have carefully spelt out our demands and suggestions pertaining to the sector for the upcoming budget. We not only want the sector to grow but also want the homebuyers to benefit.”