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First and foremost, it is good to see that the government is focusing on real estate sector with quite a few positive announcements. The industry status to affordable housing is a welcome move to promote access to priority lending and increase supply of low cost housing. The relaxation in the area measurements under the Tax exemption scheme are welcome steps and will amplify the interest of developers to built those kind of projects even in city limits. However the government should also incentive Home Loans of 50 Lakhs to 1 Crore category, because in metro cities like Mumbai, this is actually the bracket of affordable housing and not 10-35 Lakhs. There was also disappointment with no announcement on increase of home loan interest deduction and investment linked deductions.
The clarity on taxation of Joint Development Agreement should really benefit the land owners and real estate developers and shall result in more deals getting concluded thereby increasing housing supply.
The move to reduce the tenure of the Long Term Capital Gain tax from 3 years to 2 years is extremely welcome and will help the marketability of real estate as an asset class and will also result in more liquidity and churning in real estate sector which was the need of the hour post demonetization era.
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