Real estate developers have welcomed tax relief measures undertaken by the Government, stating that this will give a massive boost towards housing demand in the future while enabling them to clear off unsold housing inventory which is estimated at a whopping 6-7 lakh units across major Indian cities. The Government has already relaxed its income tax regulations for enabling sale of primary residential property priced up to Rs. 2 crore lower than the circle rate.
Previously, just 10% difference between the agreement value and circle rate was allowed by the Government although this differential has now gone up to 20% which will apply till June, 2021. Experts have stated that this is a welcome move for helping developers offloading their stuck housing inventory and owing to COVID-19, property prices will also go lower than the circle rates in some locations. With this reduction of 20%, developers may sell homes and buyers may purchase them minus any liabilities as per experts.
The latest announcement rounds off a stellar list of financial benefits and discounts already offered by the realty sector to home buyers along with the lower rates of interest on home loans. Reports have highlighted unsold inventory of nearly 5.45 lakh unsold homes across India’s top 7 cities which are majorly priced up to Rs. 1.5 crore. An additional 49,290 units have prices between Rs. 1.5-2.5 crore on an average. The Co-Founder and CFO at Square Yards, Piyush Bothra, has stated that the higher outlay under PMAY Urban and the higher gap of 20% with the circle rates will definitely enable a major boost for real estate sales, particularly in the lower and mid range segments. Other experts have also opined that residential realty will get major relief over the next 6-8 months owing to this decision. The additional funds for PMAY-U have also been welcomed by industry experts along with the creation of 78 lakh additional jobs which will boost the economy greatly.
Published Date: 12 November 2020
