Realtors give a thumps up to budget

K Ramanathan

Chennai: Realtors have given a thumps up to the Union Budget, saying the proposals made by the Finance Minister on Real Estate Investment Trusts, hiking income tax limits and reduction on the threshold for FDI in real estate will come a long way in enhancing the sagging realty sector in Tamil Nadu.

Ajit Chordia

While welcoming the budget as proactive as far as real estate sector is concerned, Ajit Chordia President of CREDAI-Chennai, said, “Amendment to IT Act to provide Real estate Investment Trusts (REITs) a pass-through status will be an advantage to commercial real estate. A number of larger IT parks and office complexes will be available for retail investors to participate and dependence on bank borrowings will come down drastically. Also, reduction on the threshold for FDI in real estate from 50000 sqm to 20000 sqm will encourage medium sized projects and developers to raise money through the FDI route. The reduction on minimum capitalization from USD 10 mn to USD 5 mn is also an added encouragement.”

Anuj Puri

Observing that the Finance Minister has taken a cautious, yet courageous path with his budget announcement, Anuj Puri, Chairman & Country Head, JLL India, a leading real estate research firm however, said, “Considering the high inflation and curtailed savings that they have had to contend with for some years now, taxpayers still expected a fair stake from the new government, such as enhanced deductions, reduction in tax rates, interest subvention on home loans and tax incentives to affordable housing.”

Puri however, stated that the real estate sector’s expectations have definitely not been met completely in this budget. “However, given the economic situation prevailing in the country, this is not really surprising as the government needs to balance myriad issues while addressing growth.”

Expressed his disappointment for not according ‘industry status’ to real estate sector, N Nandakumar, President of CREDAI-Tamil Nadu chapter, said, “We expected the government to announce industry status to the sector, which is a huge disappointment. Also, no decision has been taken on single window clearance system. Time delay in getting project approvals will continue to haunt developers and stock creation will get delayed proportionately.”

N Nandakumar

Welcoming the decision taken on REITs, Nandakumar further said, ‘This is a welcome move as liquidity in real estate will improve while ensuring lower cost of funds.’

On affordable housing, the CREDAI state head said, “Industry was expecting access to ECB for all types of projects as against present permissibility only for affordable housing projects. The government should consider it for the benefit of the sector.”

He also expressed dismay over non-removal of service tax for housing under construction, which will benefit individuals and also helps to bring down the housing prices.