Union Budget 2022 is set to happen soon. Indian finance minister Nirmala Sitharaman will present the Union Budget 2022 on February 1.
Ahead of the Union Budget, Sakshi Post spoke to some experts from the Real estate sector to find out about their expectations from Union Budget 2022-23. Here's what they have to say.
Ramani Sastri - Chairman & MD, Sterling Developers Pvt. Ltd
The Indian real estate market has seen a rebound and displayed a lot of resilience post pandemic. Now, to sustain the momentum, the real estate sector is looking forward to the much-needed reforms and incentives in the upcoming budget, especially as the sector is the primary contributor to economic growth. Even though the government had rolled out certain measures to boost the realty sector, still a lot more needs to be done to catalyse the ailing sector and address both demand and supply side. This year, the demands go beyond the usual expectation of single-window clearance and industry status. The appetite from end users needs to be rekindled though targeted demand side measures. Personal tax relief, either by tax rate reductions or amended tax slabs, is the need of the hour, which has been long overdue.
To boost the consumption in this sector, the government should focus on providing more liquidity to the tax payer by raising the ceiling of the rebate on the home loan interest. We also expect input tax GST credit for developers, reduction in stamp duty which has happened in several states and registration charges which make a sizeable difference to the cost of a project, thereby boosting home buyers' sentiment and encouraging them to go in for property purchase. There is need to redefine ‘affordable housing’ to Rs. 50 - 60 Lakhs as this would expand the benefits for homebuyers and therefore boost the end-user demand. The revival of the real estate sector is imperative for the growth of GDP as well as additional employment generation. Overall, we hope that the government, through its policies will do its best to get the economy to bounce back, and sustain long term growth of the real estate sector too with substantial measures for both the homebuyers and the developers.
Lincoln Bennet Rodrigues, Chairman & Founder, The Bennet and Bernard Company, known for luxury holiday homes in Goa.
The residential sector is seeing a strong bounce back from the coronavirus pandemic crisis. The expectations from upcoming budget are high for the real estate sector and the industry is awaiting big announcements and policy support that can not only revive the sector but also alter the future of the real estate sector. After the adverse effects of the pandemic, the real estate sector has seen steady recovery in the recent past backed by positive government reforms, low interest rates and stamp duty reduction but still a lot more needs to be done to catalyse the sector. More tax sops and higher relief on the home loan rates will woo broader segment of homebuyers and investors to buy property. The existing tax exemption on housing loans should be raised to give impetus to buyer sentiment. There is specific need for income tax relief on a second home which will benefit home buyers in a big way and also stimulate the real estate sector.
The budget can also support the industry by ensuring reduction in compliance issues. It should also strengthen the existing financing systems to provide liquidity as developers need a rational capital flow to keep up the work process. We are also hoping for GST reforms as this will reduce overall property cost and push demand for homes, granting of industry status to the overall real estate sector and implementation of single window clearance amongst others. We also hope that there will be more announcements to enhance ease of doing business for the developers and are optimistic that the real estate sector is ready for explosive growth in the post pandemic era. These reforms will also be instrumental in attracting investors, institutions and private capital players into India real-estate market. We believe that the government will take appropriate measures to spur consumer demand and give the realty sector a big shot in the arm and affirms robust infrastructure growth. All these measures together will give a big boost to the real estate sector, which in-turn would further intensify revival of the economy going forward.
Manas Mehrotra, Founder, 315Work Avenue, a leading coworking firm.
Amidst this new normal, the flexible co-working industry has become more relevant than ever and the demand for co-working spaces have surged significantly owing to its affordable pricing options and flexible work culture. Many large enterprises and corporates have also shifted their gears to the co-working space as they embraced the hybrid work model to suit their organizational requirements. Taking into consideration the growing demand and gaining popularity of hybrid working, we have major expectation from the upcoming Union Budget that can further accelerate growth of this sector. We expect the government to enable co-working firms to claim input credits on work contract and construction services supplied, as detailed under GST provisions that can enable outflow of cash and can be spared from 18% levy, which is crucial in this pandemic time. The co-working industry also expect special packages and tax relaxations for the start-up sector as this will boost the existing and upcoming start-ups, thereby increasing demand for co-working space. Presently, the rate of TDS applicable on coworking services is 10% as coworking companies provide renting of both movables and immovables.
As the industry is going competitive, it will be good if the rate of TDS on coworking services is reduced. It will enable us to provide real estate solutions to clients at economical rates and will also help in better flow of working capital. We also hope for the extension of Investment Tax Credit (ITC) to developers as this would imply lower lease rates to tenants and benefit coworking players. There is also need to reduce GST to the lowest slab for upcoming startups as it will make a significant impact on their budget. Currently, coworking spaces charge a GST of 18% to all clients and this is a big impact to startups. Hence, it can be reduced drastically. Coworking firms are also hoping that input tax credit under GST be extended to developers so that it could be passed on to companies who lease out space and thereby reduce their overall costs. The industry is also looking forward to an added infrastructural push from the Government, and a single-window clearance system that helps in faster establishment of co-working spaces to non-metro cities as well. Overall the coworking sector, which is now the new mantra for companies, is further expecting improvement in the ease of doing business.