The year may be coming to a close, but 2017 is proving to be the beginning of something very exciting for prospective home buyers as well as developers. The announcement of Union Budget 2017-18 by Finance Minister Arun Jaitley brought some interesting and crucial reforms to how money is perceived in the real estate industry. The reforms are beneficial both for buyers and sellers involved in real estate dealings and could further boost what is already a highly profitable investment in India. They can also help you speed up the process of buying your first home. Here’s a quick look at the various reforms and the impact it could create in the real estate sector.
Locality infrastructure to gain a boost in development
Over the past year, there has been an increase in the number of infrastructure projects in various cities. Chennai for that matter, experienced the construction and operation of the underground and overhead metro rail. The union budget showcased one of its biggest allocations for infrastructure development; around Rs3, 96,135 crore has been allocated for the construction of railways and Rs. 67,000 crore for highways and flyovers. This would really help speed up the development process and also ensure high-quality construction, especially across major cities and their connecting townships. Owning to the rise in residential and commercial projects across under-developed localities, this push for a better infrastructure is a very helpful one for real estate development.
Affordable housing projects given the green light for increased development
One of the biggest promises the Modi Government made during the campaigning was to grant housing for every citizen regardless of financial background. That promises is all set to see the light of day with the union budget announcing “infrastructure” status for affordable housing projects. Both buyer and developer are to benefit from this immensely; developers can claim profit-linked tax exemptions, while also being allowed a 5 year limit to complete their projects. Buyers can claim interest subvention of 4% (for loans up to Rs. 9 lakh) and 3% (for loans up to Rs. 12lakh). This project is targeted pan-India with primary focus being on Tier 2 and Tier 3 cities where the development cycle is poor. The government is looking forward to reach a milestone of 10 lakh affordable homes by 2019. This development is one of the reasons why you should never delay a property investment.
Digital only transactions for rates above Rs. 3 lakh
Real estate transactions have always involved huge sums of money. For many years, the transactions were done in hard cash, but post demonetisation, there have been many cases of payments being made digitallyfrom buyer to seller. The union budget is encouraging this further by making high volume transactions, above Rs. 3 lakh, to be done strictly through digital means. This move could eradicate concerns of fraudulent exchanging of money and boost transparency in transactions.
Individual housing loans to be refinanced by National Housing Bank
The curbing of black money, as a result of demonetisation, has brought back massive amounts of hard currency into the RBI. This has led the RBI to slash the repo rates they charge on lending banks. Due to this, a majority of banks that provide home loans are expected to reduce their interest rates. This opens up many opportunities for prospective home buyers as they can confidently seek out home loans without a worry over repayments.
Builder get more breathing space over unsold completed projects
Unsold inventory has always been a developer’s biggest plague, especially when the project is ready for handover yet no buyer is approaching. Before the budget was announced developers were liable to pay tax on notional rental income for any unsold completed project, now the union budget has given builders a time frame of one year post completion of a project to sell that project, before the taxation become applicable. This move is a boon for developers, as it gives them more time to get their projects sold.
If you are in the lookout for a home, especially in the affordable home bracket, check out the residential properties of Lancor. The popular builder is known for its high quality construction on both luxury projects and PMAY scheme projects.