Real estate demand, especially in the residential segment, is recovering from the pandemic-induced slowdown. With Union Budget 2022-23 due on February 1, Ravindra Pai, MD of Century Real Estate expects to receive the following support from Modi government for the real estate segment:-
1. Creation of demand:
“The government should allow second home purchases and interest charges as compensation for the working class. It must guarantee and maintain low interest rates for home loans for at least the next 4-5 years. Banks should be allowed to lend at 90% of the cost of the house instead of the 75%-80% cap We look forward to seeing the standardization of registration fees – these fees should be subject to GST with an option input credit for residential units. It is also important to continue to provide affordable housing interest subsidies, increased FSI and tax exemptions to stimulate demand,” said Ravindra Pai.
2. Supply side:
“Project approvals should be standardized, with one-stop-shop authorizations granted to reduce overall approval times. Banks should be allowed to lend up to 50% of land value for the purchase of land for residential projects. Additionally, it is vital that road and metro connectivity projects are completed on time to ensure that suburban land is accessible and can be developed as residential areas,” he added.
3. Cash management:
He further added: “Residential development should be categorized as a priority sector. Lending, rating and asset classification rules should be defined and linked to the economic cycle, rather than considering 30-60 rules. -90 days which tends to be more suited to the manufacturing industry We would like funding rules to be relaxed to ensure that projects do not get stuck and receive working capital to complete on time. escrows need to be more stringent and a supervisory authority needs to be in place to ensure client recoveries are used first to complete projects.We believe that a One SPV-One Escrow-One project model will help reach this goal.”
“We would like to see a review and simplification of the GST entry credit and GST on joint developments. A GST exemption on completed inventory in JD transactions would be beneficial. personal income tax of Rs. 2 Lakh and an extension of the tax exemption scheme are measures that should also be considered,” Ravindra Pai concluded.
-The Union Budget 2022-23 is expected to be tabled on February 1, 2022 by the Union Finance Minister, Nirmala Sitharaman.
-This is the 4th budget of the NDA government led by Prime Minister Narendra Modi in his second term.
-The 2022 Budget will be presented around 11 a.m. on February 1, 2022.