- Rajesh Doshi, Managing Director, ACME Group
Rajesh Doshi, Managing Director, ACME Group, on the Union Budget 2017-18:
The Union Budget 2017 is a very encouraging and favorable budget for the housing industry. The government has realised the hurdles and challenges faced by the realty sector and its buyers. They have considered all the challenges faced by the housing industry and tried to resolve most of them.
The biggest announcement is awarding infrastructure status to affordable housing. This will not only give the biggest boost to the PMs ‘Housing for all scheme’, but also enable developers to cater to the citizens who cannot afford housing today. Due to this status, developers like us who are working on these projects will get access to lower cost funds and hosts of other benefits. Moreover, by increasing the size of the affordable homes by changing from built-up to carpet area allows for better planning of the house.
Additionally, the government has taken into considerations that these are generally larger projects and take longer to complete, and thus, has increased the time-line of project to five years from three years. NHB refinancing 20,000 crore of housing loans will enable HFC and other institutes further lower the interest rates to these segments.
There is cheer even for projects which do not fall under the affordable segment. One of the major change is that the holding period for capital gains tax for immovable property is now reduced from three years to two years. This will help people who want to sell existing properties and upgrade. People will also get benefit of indexation so tax incidence will be much lower. Indexation for older properties is moved to 2001 from 1981. Again, huge tax break for people who want to upgrade from older flats. All these decisions will boost the realty sector and allied industries like steel, cement – much needed impetus to the remonetising economy.
However, some benefits for mid-income, upper-income realty buyers would have been good, especially in the metros.
From the developers side, the decision that the landowner entering into joint development agreement for development of the property, shall be subject to capital gains tax upon completion of the project is a good one and usher in lot of clarity and ambiguity in this aspect.