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GST tweak : Make Up Real Estate Sector’s Budget Wishlist

The real estate sector is expecting the upcoming Interim Union Budget for 2019-20 after being through the various structural changes and demand pressures over the past two years to rationalise the Goods & Services Tax rates for convergence of stamp duties, further incentives for affordable housing and under-construction properties within the GST rates.

To make real estate investment trusts (REITs) more attractive for investors, experts are suggesting making it more tax-efficient for investors.

“REITs have the potential to enhance the supply of commercial real estate — an enabler for the employment ecosystem. For unit holders, the long-term capital gains holding period for REIT units should be brought down from 3 years to 1year,” said Shishir Baijal, chairman, Knight Frank India.

Most developers continue to reinforce a long pending demand of awarding industry status to the sector to contribute to the economy’s growth and support to job creation after given the sector’s linkages with other industries.

“Boosting farm incomes and adding job opportunities are the twin tests for Union Budget 2019-20. Real estate and construction industry fit into the Budget 2019-20 scheme as the second largest employer after agriculture, and contribute close to 10% of GDP. Alignment of GST and personal income tax so as to boost home ownership is a strategic option that government may well consider exercising,” said CREDAI national president Jaxay Shah.

Experts are now also seeking to re-finance NBFCs by raising their limits after given the liquidity pressure created by fears of defaults by realty developers and non-banking finance companies (NBFCs) following the IL&FS default in September 2018.

“For the industry at large, one of the most critical steps that this budget can take is to increase the finance limits for NBFCs. NBFCs constituted more than 50% developer finance in 2018 as against 30% in 2011. The government must revive the sector by pumping in more money into NBFCs which lend to developers,” said Anuj Puri, chairman, ANAROCK Property Consultants.

“A road map to execute the ‘infrastructure status’ accorded to the industry in the previous budget needs to be drawn. Further extension should be given for availing benefits falling under Sec. 8O-IBA for Affordable Housing Scheme under Housing For All. The government can also consider differential GST rate an for apartment value of more than Rs 7,000 per sq. ft,” said Ashish Puravankara, managing director, Puravankara.

Most developers are expecting an abolition of GST payable by the landowner in a Joint Development Agreement (JDA) and also the removal of tax on the unsold housing inventory.

January 29, 2019 / by / in , , , ,
Builders turn to IoT, Artificial Intelligence to woo home buyers

Internet of Things (IoT) and AI (Artificial Intelligence) are no longer just axioms even for real estate developers as they are increasingly deploying these in addition to home automation in a bid to catch fancy of buyers.

Developers are warming up to the idea of incorporating home automation products to their offering, a late addition to the standard amenities list so far. Given the cost factor, developers had earlier refrained from deploying these products.

“Real estate today is no longer confined to a brick-and-mortar structure with developers constantly looking for ways to offer value to customers. It has evolved into creating a healthy environment for people to live, work and play, thereby improving the health and quality of life of households around the world”.

However, with huge reduction in technology and deployment costs, more developers are opting for such products. Platforms that use cloud-based algorithms and sensor technologies monitoring indoor environment and alerting residents for corrective actions are also being deployed to bring wellness intelligence into the connected home environment.

Wifi-based home automation products like video door panels, motion sensor-based light and security management products and appliance control products that remote manage ACs, TVs geysers and other appliances that are app-controlled are becoming a part of new developments.

October 8, 2018 / by / in , , , ,