Tax incentives are unlikely to Impact realty in Mumbai: Union Budget 2017

The Union budget might have given infrastructure status to the actual estate sector along side a couple of tax incentives but these are unlikely to impact the Mumbai realestate market in a huge way.

In accordance with both builders and experts, these incentives are unlikely to offer a boost to the realty sector, especially if it is facing an enormous slowdown.

Sukhraj Nahar, chairman and managing director of Nahar Group stated that the budget doesn't provide any respite to the buyers. “We'd anticipated that the budget could have measures to fix market drawbacks as a whole. It, however, ignored the consumers owned by the middle-income group that forms the greatest segment of real-estate buyers,” said Nahar. He added, “It has left little room for any property in this region to be within the reach of the common man.”

He said that the criteria of houses to be constructed with a carpet section of 30 square metres, was not practical as people surviving in metros prefer bigger houses.

Finance minister Arun Jaitley had in his speech stressed that the Union government was devoted to providing affordable housing schemes. He changed the criteria for affordable housing in Mumbai from built-up section of 30 and 60 square metres to carpet section of 30 and 60 square metres. 

Jaitley also declared that  buildersin Mumbai who'd be roped set for constructing affordable houses will be exempted from tax on the profit for five years.

But experts stated that adequate attention was not paid to prospective buyers who have been shying far from the market. “The middle-income group tax payers, who have been the ones badly hit during demonetisation, have already been ignored in this budget,” said Amit Wadhwani, managing director of Sai estate consultants, a major consultancy firm in the city. He added, “There is no relief in service tax or the worth added tax, which tends to improve the builders'expenditure.”

The realty sector is, however, enthused while the affordable segment has been given the infrastructure status. Now, developers can access foreign funds at a cheaper rate and also be considered a priority consumer for Indian banks.

The Union finance minister also stated that the us government plans to create 1 crore houses for the poor by 2019 combined with allocation of Rs23,000 crore for Pradhan Mantri Awas Yojana to fulfill its agenda of “Housing for All” mission by 2022.”