The Interim Budget has given a boost to the housing sector. The announced provisions made will certainly boost consumer sentiment, stimulate affordable housing demand and incentivise investors hoping for rental returns.
- The major positives included a full tax rebate for income up to Rs 6.5 lakh (including investment under Section 80C), which is likely to push demand for affordable homes, though not much in mid-income segment.
- There was an extension of Section 80IBA for an additional year; it will push affordable housing and cheer developers active in this segment.
- The Budget increased the tax exemption limit for rents earned to Rs 2.4 lakh from the previous Rs 1.8 lakh limit. This will make property investment more attractive and help boost housing sales.
- Another positive for investors was the rollover of capital gains tax on the sale of residential property. This benefit now applies to two houses instead of the previous single one.
- Importantly, the Budget provided tax exemption on notional rent of a second home, which again makes property investment more attractive and also gives a fillip to the second home segment.
- The period for taxing unsold inventory held by developers has been extended up to two years. As per Anarock data, this will benefit nearly 85,000 ready units that are unsold on the market, of the total 6.73 lakh units across top seven cities.
To sum all, the real estate sector received its due share of consideration in this Budget and the incumbent government has certainly invested heavily into the real estate sector.
Source: Financial Express