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Business EconomyPosted at: Jan 30 2023 11:01PM


Real Estate Budget expectations of Pune Industrialists

Pune Jan 30 ( UNI) Anil Pharande, President, CREDAI- Pune Metro said that land prices and flat prices are not matching the actual sale price; in some areas they are phenomenally higher than actual price of sale. The input costs of raw materials have already increased during COVID.
Added to this the bank interest rates have increased. If the ready reckoner rates are also increased it will directly impact the input costs as all approvals, premiums are linked to the ready reckoner rates, thereby ultimately impacting the flat purchaser. We have urged the Govt to look into this, have a review and rationalize the prices, rather than increase it.
Ranjit Naiknavare, Vice President, CREDAI-Pune Metro said that as the real estate sector has been on a growth path in the last 2 years across all parts and various categories, we at CREDAI-Pune Metro have several recommendations for Union Budget 2023-24. Some of the key recommendations include increase in tax exemption on interest paid on home loans, exemption on rental incomes, relaxation in investments on long term capital gains, uniformity and expansion in definition of Affordable Housing and exemption on investments in Real Estate through REITs. With increasing retail inflation and cost of living, there is a compelling need to increase the existing limit of Rs 2 Lakh on exemption of interest paid on home loan. This would not only give some extra disposable income in the hands of middle-income homeowners but would also attract prospective homebuyers to buy a home and thereby boost demand.
The price cap of INR 45 Lakh on units to qualify as affordable housing needs to be revised as there have been substantial changes in the prices of various construction raw materials, labour costs and the overall construction costs. This has impacted the overall price of housing leading to ineligibility for tax exemptions under Section 80IBA. We urge the officials to expand the definition of Affordable Housing units only on carpet areas without any price cap. We also request the Government to incentivize homeowners by exempting 100% of the rental income up to Rs. 20 lakh per annum. This would encourage people with disposable incomes to invest in properties for renting purposes. Also there should be flexibility of allowing the investments through Long Term Capital Gains in more than one residential property and there should be reduction in tax rate on long term capital gains on capital assets from 20% to 10% and reduction of the holding period to 12 months.
Kapil Gandhi (MD, Sigma One universal) said that Tax incentives on alternate real estate businesses such as ‘student housing’, ‘Co-working/Co-living’ are required. Pune is the Oxford of the east, but there is a shortage of Student housing in Pune due to feasibility. An attractive tax rebate will help developers start taking up projects, which will ultimately benefit students & floating population.
Vishal Gokhale, Chairman and MD, Gokhale Constructions said that some of the key recommendations in this year’s budget are to increase tax exemption on interest paid on home loans, exemption on rental incomes and relaxation in investments on long term capital gains. The existing limit of Rs 2 Lakh on exemption of interest paid on home loan should be increased to attract prospective homebuyers and thereby boost demand. The Government should incentivize homeowners by exempting 100% of the rental income up to Rs. 20 lakh per annum.

Krishnakumar Goyal, Chairman & Managing Director, Kohinoor Group said that the limit for affordable housing is currently Rs 45 lakh. But considering the rising inflation, this limit should be increased to Rs. 60 to 65 lakhs for big cities and 85 lakhs for a city like Mumbai. At the same time, the GST rate levied for the resident and commercial sectors should be reduced. Along with raising the standard of the construction industry, it is necessary to balance the long term and short term gains. UNI SP SSP
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