Real Estate Developers Expecting a Lot from Budget 2010

News Posted - 2010-02-16

Developers are re-calculating the upwards swing in the real estate industry, especially housing, provided Government pays special attention the sector. Various developers voice their expectations from Budget 2010.

AVNISH AGRAWAL, DIRECTOR, MERITON GROUP- Talking from common man’s perspective, the bank interest rates should be stabilised. Most importantly, stamp duty should be reduced as it puts financial burden on the buyers; it would be a real relief for the common man who has to bear the burden. Besides, for the new projects many clearances are required; if they can be done through a single window, it will be a major breakthrough.

VIJAY JINDAL, CMD, SVP GROUP- Expectations from the budget are very high. We need something that will help the real estate sector to grow leaps and bounds. Government should take steps to bring more transparency and simplicity to the processes involved in the real estate. Affordable housing must get maximum support from the government. The authorities must understand that the demand is for affordable housing and we need to bridge gap between demand and supply.

ABHISHECK LODHA, MANAGING DIRECTOR, LODHA DEVELOPERS LIMITED- We expect the finance minister to provide specific tax incentive and rationalise stamp duty registration charges, which will lead to further investment in affordable housing projects, which would in turn drive urban development. The budget should make high-priority provisions for the laying down of the necessary infrastructure so that new areas can be opened up. This should result in creating and linking up satellite settlements to main cities that will help tackle the demand-supply mismatch. Further, we look forward to flexibility in FDI norms. Additionally, the budget should offer clarity on the introduction of a real estate regulator, which may not necessarily decide on rates, but should put down firm principles in terms of property dealings and also quality parameters in terms of rating of constructions.

RAJIV SINGLA, MANAGING DIRECTOR, MAPSKO GROUP- Indian real estate sector is passing through a transition phase, where every eye is lying on budget 2010 as the tool to heal the loss. The finance minister needs to focus on offering easy interest rates with more flexible EMIs so that middle class people can come forward to buy their dream house. We should also target foreign investors or NRIs to invest their money in India.

ASHWINI PRAKASH, EXECUTIVE DIRECTOR, PARAMOUNT BUILDERS- I expect a lot from the budget 2010-11 as it can be used as an important step by our government to bring real estate market back on the track. I strongly feel that finance minister would certainly work on promoting real estate investment through various fiscal tools like, continuing income tax rebate on home loans. And at the same time interest rate on home loans should be made more affordable to bring it up to the reach of a common man. In the last two years IT sector and the real estate sector have been the most affected areas and in order to reconcile the earning capacity and to build a sense of security for citizens the government should offer some aid packages to these sectors in Budget 2010 like the US government did.

J K JAIN, CHAIRMAN, DESIGNARCH- The budget must think seriously on decreasing the excise duty to decrease the costs of infrastructural projects. The current economic situation requires the sector to be revived so that the demand for the housing industry increases. To achieve this, the government must look at reducing the property and related taxes along with the taxes on cement and steel, which together contribute to the growing infrastructure needs. Besides, the realty sector would definitely expect some cuts and provisions in the license fee and the service tax being levied in order to revive this ailing industry, apart from measures by the Government to reduce the interest rates on loans to the housing sector. Also, amount of rebate must be increased by Income Tax department for housing sector.

ANIL KUMAR SHARMA, CHAIRMAN, AMRAPALI GROUP- As real-estate sector in India contributes five to six per cent of our GDP growth, the sector needs special attention. Our expectations are not very high but are rational. Government must think seriously about low cost housing. Since the stimulus package, bailed out the Nation from recession, we expect that same should continue for at least two more fiscal years.

GAURAV GUPTA, DIRECTOR, S G ESTATES LTD- While developing the housing for low strata income category, for example, economically weaker section (EWS) and lower income group (LIG) housing, the developer is not able to utilise entire floor space index (FSI) since the height is kept at ground plus three to keep the costing low. So amendment should be made for the balanced FSI usage. In the same lines, some cross subsidisation can be called for, such as refunding the stamp duty to developer once the project is complete. If sec 80 (IB) is restored, nothing like it. Under Section 80 IB (10), in the case of construction of housing projects, 100% of the profits derived in the previous year from a housing project can be deducted if the total commercial space in the project did not exceed 5% of the total built-up area or 200 sq ft, whichever is less.

ASHOK GUPTA, MD, AJNARA INDIA LTD. The finance ministry has allowed external commercial borrowing (ECB) in realty projects, which includes integrated townships of 25 acres or 50,000 sq m. However, the Reserve Bank of India has not yet notified it. ECBs should be permitted for funding construction costs of at least those real estate projects which qualify for 100% FDI. I would expect that limit of Rs 1 lakh specified for deduction for repayment of principal amount of a home loan for self occupied residential property should be extended to Rs 2 lakh. I also wish that extension of tax holiday for housing projects under Section 80 IB (10) should be allowed for conceptualising of new projects while also encouraging more projects to come up in view of the incentive that would be coming.

Source: Indian Realty News

Realty Sector Prepares A Wish-list For The Budget

With the budget coming up soon, the Indian realty sector has lined up an extensive wish-list, which includes a tax holiday under Section 80-1B for affordable housing, promoting real estate mutual funds and clarity on introduction of a real estate regulator, among others. With a strong push now being given to affordable housing, "a tax holiday under Section 80-1B for affordable housing should be given for units below 1,200 sq.ft.," Marathon group's manging director, Mr Mayur Shah, said. Lodha Developers' managing director, Mr Abhisheck Lodha, said a specific tax incentive and rationalisation of stamp-duty registration charges would lead to further investments in affordable housing projects. In addition to this, promoting real estate mutual funds is high on the sector's wish-list with Man Infraprojects' Director, Mr Nikhil Mansukhani, saying "Promoting real estate MFs and bringing flexibility in FDI norms could be good alternatives to address the issue of capital funding requirements for high-end projects."

Source: 18 Feb 2010 DNA