http://www.business-standard.com/india/news/realtors-hope-budget-to-make-business-briskier/465343/
Realtors hope Budget to make business briskier
Realtors hope Budget to make business briskier
Want green development, end to hardening of interest rates
Vikas Sharma / New Delhi/ Chandigarh
Feb 22, 2012, 00:26 IST
The real estate players are all ears to the upcoming union budget, as all of them are anticipating measures that would trigger a growth in the sector.
They also foresee an end to hardening of interest rates, as the developers are looking for the union budget to feature measures that would help ease the monetary policy.
The players are also seeking incentives for the promotion of green development, which would help reduce carbon footprints.
The third quarterly result reflects the concerns on sales and profits, while retiring debts remain a significant challenge for the real estate players.
While the net profit for Parsvnath Developers Limited had declined by 28 per cent in the third quarter, DLF continues to struggle with a debt which is still above Rs 22,000 crore.
Looking ahead, most of the real estate players are anticipating a benign interest rate regime that would ease some pressure.
High costs of funds is one of reason that Pradeep Jain, as chairman of Parsvnath developers, says has put pressure on the margins for the company.
Jain, who also heads the Confederation of Real Estate Developers’ Association of India (Credai), says the palyers were anticipating the forthcoming Union Budget to leave room for the RBI to address the issue of easing the country’s monetary policy. “Besides a benign interest-rate regime,” he said, “the Credai has also sought an extension of tax holidays for housing projects under Section 80IB (10) of the I-T Act, enhancement of the benefit to individual home buyers and extending I-T benefit to affordable housing projects.”
As for DLF expectations from the budget, its executive director (north) Rahul Mehta notes that the construction sector is among the largest employers.
The growth in the sector has a direct impact on ancillary industries such as steel and cement, thus creating a ripple effect in the market. Hence, as the budget needs to provide the requisite stability to the economy, it now needs to focus on strengthening the real estate sector. Brotin Banerjee, managing director and CEO of Tata Housing Development Com-pany Ltd (THDCL) says it is time the government started announcing sops for green projects that could lead to increase in the green projects.
The sector contributes to 5 per cent of global carbon emission. Also, consumers opting for green developments should be incentivised by reducing stamp duty, Banjeree added.
In the case of houses raised under a budget of Rs 35 lakh from the current cap of Rs 20 lakh. This is considering the rising property prices, Banerjee said.
The realtors believe more customers could be incentivised by an upward revision in the interest on the deduction limit of home loans -- under Section 24 of the Income Tax Act: from Rs 1.5 lakh to Rs 2.5 lakh.
Lowering the I-T rate on rental income on residential units from current rates as per tax slabs to a special rate of flat 15 per cent or increasing the standard deduction from the rental income under Section 24 of the I-T Act from the currently 30 per cent to 50 per cent, he added, would “encourage rental housing and thereby help overcoming the situation of un-affordable housing”, he added.
Arun Gupta
The real estate players are all ears to the upcoming union budget, as all of them are anticipating measures that would trigger a growth in the sector.
They also foresee an end to hardening of interest rates, as the developers are looking for the union budget to feature measures that would help ease the monetary policy.
The players are also seeking incentives for the promotion of green development, which would help reduce carbon footprints.
The third quarterly result reflects the concerns on sales and profits, while retiring debts remain a significant challenge for the real estate players.
While the net profit for Parsvnath Developers Limited had declined by 28 per cent in the third quarter, DLF continues to struggle with a debt which is still above Rs 22,000 crore.
Looking ahead, most of the real estate players are anticipating a benign interest rate regime that would ease some pressure.
High costs of funds is one of reason that Pradeep Jain, as chairman of Parsvnath developers, says has put pressure on the margins for the company.
Jain, who also heads the Confederation of Real Estate Developers’ Association of India (Credai), says the palyers were anticipating the forthcoming Union Budget to leave room for the RBI to address the issue of easing the country’s monetary policy. “Besides a benign interest-rate regime,” he said, “the Credai has also sought an extension of tax holidays for housing projects under Section 80IB (10) of the I-T Act, enhancement of the benefit to individual home buyers and extending I-T benefit to affordable housing projects.”
As for DLF expectations from the budget, its executive director (north) Rahul Mehta notes that the construction sector is among the largest employers.
The growth in the sector has a direct impact on ancillary industries such as steel and cement, thus creating a ripple effect in the market. Hence, as the budget needs to provide the requisite stability to the economy, it now needs to focus on strengthening the real estate sector. Brotin Banerjee, managing director and CEO of Tata Housing Development Com-pany Ltd (THDCL) says it is time the government started announcing sops for green projects that could lead to increase in the green projects.
The sector contributes to 5 per cent of global carbon emission. Also, consumers opting for green developments should be incentivised by reducing stamp duty, Banjeree added.
In the case of houses raised under a budget of Rs 35 lakh from the current cap of Rs 20 lakh. This is considering the rising property prices, Banerjee said.
The realtors believe more customers could be incentivised by an upward revision in the interest on the deduction limit of home loans -- under Section 24 of the Income Tax Act: from Rs 1.5 lakh to Rs 2.5 lakh.
Lowering the I-T rate on rental income on residential units from current rates as per tax slabs to a special rate of flat 15 per cent or increasing the standard deduction from the rental income under Section 24 of the I-T Act from the currently 30 per cent to 50 per cent, he added, would “encourage rental housing and thereby help overcoming the situation of un-affordable housing”, he added.
Arun Gupta
