Getamber Anand, national president of industry body Confederation of Real Estate Developers’ Associations of India ( CREDAI) says the government has actually understood that ease of doing business has to become reality to spruce up the GDP.
“There has been a lot of rationalization of taxes. Small pain points of the real estate industry like harassment by excise department on ready mix concrete being manufactured on site for self use have been addressed,” he says.
In his speech, Jaitley extended excise duty exemption, which is presently available to concrete mix manufactured at site for use in construction work to ready mix concrete as well.
“On the supply side, for creating affordable housing, they have understood that without private sector participation, this cannot be achieved so therefore certain incentive has been provided for private players by way of tax exemption for houses that are made in the next three years. This is very welcome,” he says.
Anand pointed out that the big challenge before the industry is to now lobby with states to increase density norms to achieve 30 sq metres and 60 sq metres of housing.
In Haryana, for examples, the density norms are so low that you cannot do 30 sq metres of housing at all.
“Supply of these kinds of homes cannot increase unless density norms area changed and density is increased for housing projects,” he says.
The budget has also put the onus on real estate developers to finish houses within three years of start if they are to avail the exemption for affordable homes. “This would also be a challenge for us in the absence of single window clearance for project affordable,” he says.
The exemption for affordable housing projects would bring in a 15-20% upside on profits after paying the MAT tax for a real estate developer building such a project.
“That increases by IRR, which means it will be easier to attract foreign and domestic investment for housing projects,” says Anand.
(source by:-The Times of India )