Budget 2021: Real estate sector expects lower home loan interest rates.
Budget 2021: Considering the forward and backward linkages of the construction sector with other sectors of the economy, and the urgent need to provide housing to large segments of the low-income population, the government should pay special focus to low-cost housing in Budget 2021, industry body Confederation of Indian Industry (CII) said in its Pre-Budget Memorandum 2021-22. Currently, the government offers interest subvention of one per cent for low-cost housing loans up to Rs 15 lakh, provided the housing cost does not exceed Rs 25 lakh. Industry body CII suggests that interest subvention scheme should be extended to cover the total housing cost of up to Rs 35 lakh.
Commenting on measures to boost all segments of the real estate sector, Lincoln Bennet Rodrigues, Founder and Chairman, Bennet & Bernard Group, known for luxury holiday homes in Goa said that the government should further relax income tax norms, push more reforms in goods and services tax (GST) and announce industry status to the real estate sector in the upcoming budget.
According to Mr Lincoln, the government could unleash a series of reforms and consumption boosters to increase the credit off-take from banks for easing liquidity. There is also a specific need for income tax relief on a second home which will benefit home buyers and also stimulate the real estate sector. A single window clearance could drastically improve the approval process and expedite project execution. The real estate sector also expects lower home loan interest rates, reduction in stamp duty, and registration charges which make a sizeable difference to the cost of a project.
Further, industry body CII also suggests that the allocation under Pradhan Mantri Awas Yojana (PMAY) should be increased from the Rs 27,500 crore allocated in Budget 2021.