Real Estate Highlights: Union Budget 2017-2018 Affordable housing finally gets the Infrastructure Status.: A right step towards the long pending industry demand. Will provide impetus to 'Housing for All' initiative, facilitate easier access to institutional funding (by becoming part of priority sector lending and accessing foreign funds at a cheaper cost by way of debt ), associated tax benefits will help cashflows since the margins in affordable housing projects are very low and at an overall level, increased supply of affordable housing units will help keep real estate prices (from a demand - supply equilibrium perspective) in check. Fine prints awaited, shall provide more clarity.
Capital Gains: Capital gains on JDA to be taxed only at product launch, 1 year tax exemption from notional rental income from unsold inventory and reduction of long term capital gains tax period provide respite to investors/ developers of real estate. This helps especially those holding real estate inventory/ stock. This is a great move to provide providing tax relief to developers in the residential sector where the sales have significantly dropped post demonetisation move.
Tax Concessions: Extension of project completion from 3 years to 5 years for tax concessions is an extremely welcome step. The change from Built up area to carpet area for the purpose of tax concessions in the affordable segment will improve transparency. Real estate developers to get tax relief on unsold stock. Miscellaneous: Dispute resolution in infrastructure projects in PPP mode will be institutionalised India to be Global Hub for Electronics Manufacturing. This will boost Industrial Real Estate in established and newly proposed Industrial Corridors. DMIC among other more matured Industrial Corridors newly established may see demand offtake due to this proposed budget measure. Airport Authorities of India Act to be amended to provide monetisation of land assets. Courtesy: economictimes.indiatimes.com