Housing is one of the key indicators of economic progress, social security and overall development of the nation. The government looks to further push the housing and real estate market in the coming year, if the union budget for 2016-17 is anything to go by. There are some welcome and long-pending measures for the real estate sector which should give the sector as well as the thousands of homebuyers much needed incentives.
Home buying consumers, especially first time buyers are likely to benefit much from the budget as well as other measures announced by the government. Home buyers can now avail additional tax deductions of up to Rs. 50,000 and continue to avail the existing incentives given to all home owners. Previous tax incentives and the fresh impetus could offer savings of over Rs. 2 lakhs per annum to home owners.
In his budget speech Finance Minister Mr.Arun Jaitley clearly earmarked his priorities for the sector. He said, “In furtherance of the goal of the government of providing ‘housing for all’, it is proposed to incentivise first-home buyers availing home loans, by providing additional deduction in respect of interest on loan taken for residential house property from any financial institution up to Rs 50,000.”
The tax incentives are capped only for homes valued at less than Rs. 50 lakhs and on home loans no greater than Rs. 35 lakhs. However, given that most Indians would prefer the affordable housing concept – these should still be a very welcome move for many home buyers.
Further good news awaited people on the housing front as those living in rented accommodations can now claim improved HRA deductions totalling Rs. 60,000 per annum. Additional tax savings from rental expenses can be of great assistance, providing the much needed impetus to the first time home buying community.
The incentives haven’t stopped with the Union budget as the Real Estate Bill has also been passed by the parliament and provides additional protection to home owners in case of delays in project completion and occupation. This means that the consumer is more protected and can expect to receive adequate compensation should the need arise.
Prices in the affordable housing segment are expected to come down due to the abolishing of service tax for homes which have a carpet area of 60 square meters currently being developed under any of the state or centrally-aided housing schemes.