Team NewsBarons presents the views and reactions of the leaders of the real estate sector on the impact of the Budget 2021 announcements.
It is a get well soon type of Budget: Dr. Niranjan Hiranandani
On real estate aspects, the proposals for the annual budget reinforce the Government’s focus on affordable housing. For the home buyer, the second extension of the deadline till 31 March 2022 for the additional Rs1.5 lakh tax deduction given on loans taken to buy a house in an affordable housing project is welcome, as is the developer whose affordable housing projects also get an extension for tax benefits, for projects completed till March 31, 2022. Similarly, tax exemption for notified affordable housing for migrant workers, and the deduction on payment of interest for affordable housing being extended by a year will give a fillip to this emerging segment. As affordable housing attracts only 1% GST and Rs 1000 stamp duty in the state of Maharashtra will augment the production of affordable housing in the state. The enhanced spending on public infrastructure projects like ports, railways, airports, warehousing, gas pipelines, metro, economic corridors is laudable and welcomed by industry that will give impetus to the employment generation and attract the essential investment to lift up the economic revival.
Budget 2021 will result in job creation in the informal sector: Anuj Puri
As anticipated, affordable housing and rental housing got a big boost with the govt. extending the period for extra deduction of INR 1.5 lakh available for loans up to 31st March 2022.
Considered ‘the Margaret Thatcher moment’ for the FM, Union Budget 2021-22 was literally a make-or-break event. The circumstances are unprecedented – it is the first budget presented after a pandemic which shattered the economy globally, and in India. The impact of the pandemic has been catastrophic with early govt. estimates indicating a 7.7% contraction in FY 2020-21 – the biggest GDP growth plunge in over four decades. Expectations across sectors were at an all-time high, though the fiscal pressures on the finance ministry are nothing short of crippling.
Budget announcement on rental housing will go a long way in boosting the real estate market: Dhruv Agarwala
Amid a sharp improvement in consumer sentiment with regard to property purchases post the start of the COVID-19 vaccine rollout, the government’s move in the Budget to extend the benefit of additional Rs 1.5 lakh tax deduction on home loan interest, until March 31, 2022, will act as a further impetus to the residential property sector. This move will augur well, especially for the affordable housing segment, which will also benefit from the decision to offer a tax holiday for affordable housing projects for one more year, to boost supply.
The support announced today by the Honourable Finance Minister for rental housing too will go a long way in boosting the real estate market and will ease a lot of pressure points in the rental home market.
The industry was expecting more concrete announcements: Ramesh Nair, former CEO of JLL India
Positives for the real estate sector include extension of INR 1.5 lakh additional deduction by 1 more year for affordable housing, tax holiday for affordable housing extended by one more year and new tax incentives for affordable rental housing for migrant workers. The creation of a professionally run development financing institution and the creation of an asset reconstruction company for stressed assets will also have spill over benefits for the real estate sector. The government’s new divestment targets and the announcement that divestments already announced to be completed by 2022 will also help the sector as prime real estate owned by the public sector will come into the market for development.
Budget presented is visionary and focused on the nation’s growth: Surendra Hiranandani
The union budget presented is visionary and has focused on the nation’s growth. With its focus on the agricultural and rural sectors, infrastructure, health, education, job creation, digital economy, etc, it is a holistic budget that will have an overall positive impact on the economy . With the growth outlook looking promising and support in terms of government spending, we will witness a noteworthy traction in the real estate sector too this year. The government has played a tough balancing act between providing demand impetus and keeping a watch on fiscal deficit.
Though real estate has not got anything directly from this budget, there are announcements that will indirectly help the sector. Allotment of a massive capital expenditure corpus in order to enhance and support national highway projects, roads and other ancillary infrastructure shows the continued commitment of the Government to strengthen connectivity across the country which in turn will largely improve real estate over the next few years.
Budget has a definite direction for strong economic growth: Kamal Khetan, Sunteck Realty Ltd
The Union Budget has packed some great ideas and a definite direction for strong economic growth ahead, especially through infrastructure, capital expansion and banking and financial services. For real estate, the move to extend the tax holiday available for the purchase of affordable houses as well as for the affordable rental housing projects is a welcoming move as it would further strengthen the confidence among both developers and homebuyers. The move will certainly prompt more demand, especially among first-time buyers who generally fall in the lower and mid-income segments. Also, the extension of the tax holiday on affordable housing projects for developers by another year will increase the project launches in this segment as they would get additional time and resources. Apart from this, the mega infrastructure development and upgradation to be undertaken across India will add much value to the real estate sector.
Proposed steps will strengthen the overall real estate sector: J C Sharma, Sobha Ltd.
Some of the proposed laudable steps related to the housing segment will certainly give a fillip to the buyers of affordable homes as the time period of taking loans to buy such homes have been increased by another year i.e. – till March 31, 2022. This will help consumers to continue to avail additional tax benefits of Rs. 1.5 lakh u/s 80EEA of the Income Tax Act for another year. By extending the period by one more year, the Government has clearly indicated its emphasis for the affordable segment of housing. Section 80 EEA provides tax benefit up to Rs. 1.5 lakh on the interest paid on loans taken for affordable residential housing. This benefit is over and above the tax benefit of Rs. 2 Lakh available u/s 24 (B) of the Income Tax Act on interest on the housing loan.
Budget 2021 has been on ensuring increased liquidity for all stakeholders: Piyush Bothra, Square Yards
As far as the real estate sector is concerned, clearly the government’s focus in Budget 2021 has been on ensuring increased liquidity for all stakeholders in the short and long term. Budget 2021 again highlighted the government’s resolve towards promoting ‘housing for all’. Measures such as the one-year extension of the Rs 1.5 lakh deduction on payment of interest for affordable housing and on the tax holiday for affordable projects brings in much needed relief for the buyers as well as the developers.
Further, announcement of the setting up of a Development Finance Institution (DFI) with an allocation of Rs 20,000 Crore is commendable. This will again strengthen the flow of funds to the cash strapped real estate and infrastructure sectors.
It can be easily said that the Budget was a representation of the inherent resilience shown by the Indian economy at the hands of adversity and showcased the government’s strong resolve to pull the economy back on its foot.
Union Budget aims to revive demand and elevate economic growth: Sanjay Daga, Runwal
The first digital and post-pandemic annual budget exercise has delicately crafted a strategy to boost redistributive and equitable growth, reviving investment and giving fillip to ease of doing business. Union Budget 2021-22 is forward-looking document and aims to revive demand and elevate economic growth. We welcome the government’s move to extend tax holiday by one year for affordable housing projects and exemption from TDS on dividend paid to Real Estate Infrastructure Trusts / Infrastructure Investment Trusts. We would have expected granting Infrastructure status to the entire Real Estate sector which could be beneficial for lenders, developers and home buyers and will enable access to liquidity and speed up project completion. Setting up of Development Finance Institution to address funding gaps, highest infrastructure spending, recapitalisation of banks, boost to divestment and monetisation of government assets will surely ensure increase in the growth momentum. Overall, the budget covers major themes such as health, which is on expected lines, sprucing up of infrastructure to ensure growth and job creation and ease of doing business. And we would also like to add that the budget is favourable for corporates and individuals, as there is no new tax burden being implemented.
We can see the Government’s focus on affordable housing: Aditya Kushwaha, Axis Ecorp
The budget is largely focussed on healthcare and infrastructure, which will have a ripple effect on the development in the other sectors including real estate. The finance minister has also given special importance to human capital. Steps taken in this direction in conjunction with growth in infrastructure will lead to an increase in the disposable income of people which could bring a good scope for investment in real estate.
In the Annual budget for 2021 too, we can see the Government’s focus on affordable housing. The deduction on payment of interest for affordable housing has been extended by a year. This move will improve customer buying behaviour. At the same time, to boost the investment coming via the NRI route, the taxation has been simplified which will incentivise NRIs to invest in our country as they will get a tax rebate on the rental income. This move will also give a boost to holiday homes and commercial real estate in the country.
Furthermore, there have been relaxations offered in real estate transactions, capital gains, business profits, and rental income which in turn will uplift the real estate sector.