Post-Budget Reactions: What Real Estate Leaders Have To Say About Effects Of Union Budget 2019-20?

Interim Finance Minister Piyush Goyal presented the interim Union Budget 2019-20 on February 1. Although the real estate industry had laid down a lot of expectations from the interim budget (which were not met completely), the industry experts still seem to pretty satisfied and upbeat over what is being offered.

Real estate players have welcomed the tax benefits and exemptions announced in the Union Budget 2019-20. Owners of unsold inventory are in jubilation as they are exempted from paying income tax on notional rent for a period of one year.

Here is what various real estate experts and leaders have to say about Budget 2019-20.

Shishir Baijal, Chairman & Managing Director- Knight Frank India

Mr Shishir Baijal considers this budget to be one of the best in many years for the real estate sector.

“It has addressed both the demand and the supply side of the sector,” Shishir Baijal told Realty Buzz IN. “The benefit of rollover of capital gains has been increased from one house to two houses, upto INR 2 Crores (once in a lifetime), is a tremendous step by the government that will boost sales in both primary and secondary markets.

Shishir Baijal, Chairman and Managing Director, Knight Frank (India) Pvt. Ltd.

For the supply side, the government has taken into consideration the challenge of unsold inventory and has therefore increased the period of exemption for notional tax on unoccupied units from the prevalent 1 year to 2 years. This will give developers a big relief allowing them to concentrate on sales strategies.

With all the sops announced by the FM today, the fiscal deficit being at predicted 3.4 % further spells reassurance of financial discipline.”

Dr Niranjan Hiranandani, National President- Naredco, and Co-Founder & MD- Hiranandani Group

Dr. Niranjan Hiranandani believes that affordable housing should get a boost as a result of positives mentioned by the Hon’ble Minister Shri Piyush Goyal in his budget speech.

“We should see affordable housing get a boost as a result of positives mentioned by the Hon’ble Minister Shri Piyush Goyal in his budget speech,” Dr Hiranandani said. “Top of the list would be extension by a year of Section 80-IBA of the Income Tax Act, this will play a major role in helping achieve the target of ‘Housing for All by 2022’, and will incentivize the real estate industry to make more homes available under affordable housing, given that housing projects approved till 31st March, 2020 will be eligible for this incentive.

Pic Credit: Twitter/Niranjan Hiranandani

After the positive budget, home seekers look forward to GOM recommendations on GST in real estate.”

Mr Sankey Prasad, Chairman and Managing Director- Synergy Property Development Services

Mr. Sankey Prasad believes that the steps taken in the budget could percolate into direct & indirect benefits to the housing sector.

“I believe the proposal to extend Income Tax benefits for affordable housing schemes coupled with doubling NIL Income Tax slab from 2.5 to 5 lakhs will definitely be an impetus to the affordable housing sector,” Mr. Sankey Prasad told Realty Buzz IN. “Also, exemption of tax on notional rent, on unsold  inventories up to 2 years would provide relief to the Developers on the short term and help focus on newer projects.”

Mr Madhusudhan G., Chairman and MD- Sumadhura Group

Mr. Madhusudhan believes that this is a favourable and bold budget for the real estate industry on many fronts.

“Though many of the expectations, whether it is bringing in a structured single-window clearance or granting infrastructure status to the industry didn’t materialize, the government’s stance towards reducing the GST burden on homebuyers is seen as a welcome move,” said Mr. Madhusudan G. “In its ambitious quest to become a 5 trillion economy in the next five years, the interim budget, viewed as ‘Vision 2030’, has struck the right chord on several fronts, whether it is building next-gen infrastructure or building stronger digital India.”

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