The impact of Union Budget on real estate industry
As soon as the central government announced “Union Budget for 2019” it was crystal clear that the lion’s share is going to the infrastructure and allied development. The developers have not only accepted the budget and but have also appreciated it as it’s indeed a boost to the realty sector. Many progressive steps have been considered and put in action such as rental housing, sops for affordable homes, etc. which have managed to strike a balance between the rights and responsibilities of both developers and homebuyers.
Let’s learn more about the impact of budget on the realty sector:
Understanding the benefits of Union Budget:
The budget presented by our Finance Minister Nirmala Sitharaman allowed an additional deduction of up to Rs 1,50,000 on interest paid on home loans borrowed up to March 31, 2020, for purchase of an affordable house valued up to Rs 45lakh. This will be in addition to the existing interest deduction of Rs 2lakh, providing a further boost to the ailing housing sector. This means a person purchasing an affordable house will now get an enhanced interest deduction up to Rs 3.5lakh.
This will provide the benefit of around Rs 7lakh to middle-class homebuyers over their loan period of 15 years.
Boost in Affordable Housing
The proposed budget by the central government is purely dedicated to the affordable housing segment. An additional interest deduction of up to Rs 1.5lakh on a home loan will increase the saving capacity of home buyers and thus encouraging the home purchase. The Union Budget and the Pradhan Mantri Awas Yojana both serve the same purpose that will benefit affordable home buyers significantly. This will also reduce the demand-supply gap for affordable housing making both the developers and buyers equally satisfied.
Focus on Rental Housing
According to the statement given by Nirmala Sitharaman, “Several reforms would be undertaken to promote rental housing as the current rental laws are archaic and they do not address the lesser-lessee relationships fairly”. As per her statement, The Model Tenancy Law will be finalized which will boost the sector. Currently, the high cost of houses and high property taxes leads to a low rate of return (ROR) from rental housing, which makes renting out an un-remunerative proposition. The new Model Tenancy Act is expected to balance the rights and responsibilities of both, landlords and tenants that will make the rental market more efficient and streamlined across the country.
Among the many notable announcements for the real estate sector, the increased deduction of interest on the loan taken to purchase self-occupied house property; 100% deduction for the income of affordable housing projects; the reduced holding period for long-term gain on immovable property; were the key highlights of the budget.
In short, the new budget is a hailing boost to the realty sector that will drive the much-needed urgency in sales and bring the fence-sitters back into the market soon. And as a renowned developer, the Namrata Group welcomes the budget and looks forward to making the most out of it. Namrata Group has an array of affordable housing projects all around Pune. So visit now and find your perfect home.