From a real estate standpoint, the last year was largely spent getting acclimatized to the new policies which ushered better transparency and accountability in the sector. While the government has taken several concrete measures, there is still a long way to go. We hope that the government looks into some of the key concerns raised by the industry and addresses the same soon.
The Indian real estate sector is the most highly taxed with the combination of high direct and indirect taxes, stamp duties and levies for development approvals. These extraordinarily high taxes coupled with high interest rates have been crippling growth. To bring back growth in the sector which is so vital to any developing economy, we expect government to impart industry status to the sector which would enable developers to cut capital costs and pass on the benefits to consumers. The government should speed up its measures for infrastructure development which will ensure cheaper land for housing and push affordability.
Overall, the result of the elections augurs well for the growth of the Indian real estate sector. However, to achieve the objectives of housing for all mission, the government also needs to incentivise the key stakeholders through direct and indirect tax measures.
There is significant expectation to cut GST rates to a single, standard rate, and not have multiple rates or taxes. The abolition of stamp duty or its incorporation under GST will be an added advantage. Relaxation in income tax slabs will also be welcomed as it will allow salaried class to make further investments in real estate.
The government must look at increasing the deduction limit under Section 80C from the current Rs 1.5 lakh. The need of the hour is to lower interest rates which will help resolve the existing liquidity crisis and boost housing demand.
Apart from these, elimination of taxes on vacant property, dropping circle rates section from Income Tax Act, ensuring tax rationalization on REITs and lowering costs of land acquisition are some of the measures that will positively impact the sector.
We expect continued momentum for Indian realty to attract new investments into the sector and hope that the government brings positive measures for the holistic growth of the Indian real estate sector, imperative to fuel India's growth engine.
(Surendra Hiranandani is founder and director of House of Hiranandani)
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