Budget 2016 Expectation of Home buyers

Real Estate has a lot of Expectation from Budget 2016

what realty market 

& the home buyers wish from the Union Budget 2016

The government is new with lot of optimism with lots of altruistic and reformative propaganda. It is true that the real estate sector is reviving from its long lull going on for five or six years. The year 2015 was not so prospective with the residential sector not doing so well but the sales figures were slowly surging and the unsold stock reducing to an extent. This imbibed hope for the sector and at that backdrop the commercial sector showed some amount of optimism with sales and absorption rate touching the second highest in history since 2011 in the country. Of course it can be assumed that there is economic growth in the country due to which there is demand of commercial sector realty products and this will surely have an impact on the residential sector as well.

The other sector was the retail where not much of an activity was noticed but the experts opine with the turn of the year 2016 there will be big players entering the market inducing the demand of retail sector real estate as well. As we have discussed in our previous post on what 2016 has in store for real estate. So all these taken together the union budget 2016 is a crucial factor that everyone is looking at with patience and waiting and watching to see what difference it can make to the economy and the realty sector. In this backdrop the customers or the home buyers who are the main investors of the sector who does have a wish list that the markets need to fulfil. Alongside that the government has to facilitate so that market is able to fetch the wish list to the end users. Let us probe and do a detailed enquiry and find out as to what the market wants. 

Talking about the pain points of the home buyer there are of course many. There are many problems that happen in the delivery of the projects, like delays, mismatch of commitments, price increment and hoard of hurdles that the customers have to face. Although there are rules not to sell any land in undeveloped layouts but still there are no provisions for builders who are constructing apartments. Thus it is obvious that for the real estate sector, to grow it has to win the confidence of the end users and the government has to introduce the policies and programmes that would instill more confidence and harbour protection to the investors. 

As of now the realtors have opined that on purchase of an under construction property the tax benefit that the buyer can claim is of Rs. 2 lakhs and that too after the possession of the property if the construction is completed within a period of three years. In case the developer delays further than three years this benefit is reduced to Rs. 30, 000 but they go on paying higher interest. Here you may like to know the mistakes that a buyer should avoid while dealing with property. If one looks at the reality then the buyers who go for their first homes has to additionally pay the rent as well apart from the EMIs also. 

The market watchers suggest that the Union Budget should make such measures and tax provisions for the end user or the home buyer so that it allows the tax benefit from the time the buyers pay the EMIs and not when the possession is given. This will certainly lessen the burden of tax on the buyer and the home loan disbursement will also be at a higher speed. 

Another measure that the government could take is the increment of the tax deduction limits on the loans of homes and the insurance premiums. The government has kept the limit as Rs. 2 lakhs and this should be adjusted in tandem with the sky rocketing prices of the top metros where people struggle to buy a house. Tax concessions on the house or home insurance can also encourage the usage of insurance which would help the economy as well.

There is a need for the self-employed community to be given more tax benefits than ever before as today the number of the start-ups has grown more. Not only that due to the spurt of professional education many are trying to start businesses and their own profession for whom the tax deduction for house rent allowance is just Rs. 2000. This is felt by many as unjust and thus buyers expect that Modi government has to look into the amendment of the Section 80 GG which specifies it and should work on increasing the limit.