Thane Property News

  • 02 February

    Budget 2019 Highlights: What Did Home Buyers And The Real Estate Sector Gain

    1 BHK Apartment in Thane Ghodbunder Road Thane
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    We examine some of the important announcements in the interim budget 2019 and its expected impact on the real estate sector and home buyers.

    The government of India has presented the interim budget 2019, addressing several long-standing issues of the real estate sector. There were big expectations from the government in an election year, even though the budget was an interim one. The government has made some big announcements that will provide significant relief to the common people, including the home buyers.

    Income Tax Rebate For Income Up to Rs Five Lakhs Per Annum

    The government announced a tax exemption on individual income of up to Rs five lakhs, translating into ‘zero’ tax, for people falling in the applicable tax slab. If the person further invests in tax saving investment under Section 80 (C), then, the tax-free income will increase to Rs 6.5 lakhs. Similarly, the tax benefit under Section 24, 80 (D), 80 CCD can easily take the tax-free income beyond Rs 7.5 lakhs. This is seen mainly as a game-changing move by the government for the realty sector and the home buyers.

    “The proposal to give tax rebate for income up to Rs five lakhs, will help in increasing the home buyer’s budget and can provide a big boost to the demand for housing. The budget gives more disposable income in the hand of the residential real estate buyer, encouraging them to push their budgets up for new homes, while also providing tax incentives for investing in a second home. It should result in an increased demand in the residential market. Hence, from a real estate perspective, Colliers International India gives the budget 2019, a 7/10,” said Joe Verghese, managing director, Colliers International India.

    Emphasis On Infrastructure Growth

    The government has announced Rs 19,000 crores towards Sadak Yojna and come up with a future vision that envisage boosting of social and physical infrastructure. “Housing under PMAY and increase of infrastructure development, in the budget, are positive steps towards real estate affordability and accessibility, because these two initiatives would enable more people to buy their homes in the city, as well as the outskirts,” says Pankaj Jain, MD, Realistic Realtors.

    Extension Of The Benefit Under 80 IBA By One Year

    The government has announced an extension of the benefit under Section 80 IBA by another year, i.e., till 2020. The move will benefit the developers and new affordable home buyers and help in achieving the ‘Housing for All’ vision.

    Reinvestment Of Capital Gains In Two Houses

    The announcement, to allow reinvestment of capital gains in two homes, is expected to boost investment in residential real estate. As per the budget, capital gains has been extended to investment in two residential houses, for an individual having capital gains up to Rs two crores. The move can create more demand and also make the realty market more attractive.

    Increasing The Period For Taxing Notional Rent On Unsold Inventory, From One Year To Two Years

    Unsold inventory is a problem for developers and notional rent on such inventory further adds to their woes. At present, the notional rent is levied, if the unsold inventory is at least one year old. In Budget 2019, the period has been increased to two years, which will give huge relief to realty players.

    “This is a welcome move and will benefit the housing sector, as currently, there are more than 6.73 lakh unsold units across the top seven cities,” explains Anuj Puri, chairman of ANAROCK Property Consultants.

    TDS On Rental Income Increased From Rs 1.8 Lakhs To Rs 2.4 Lakhs

    “There will now be no tax on house rents up to Rs 2.4 lakhs, from the previous limit of Rs 1.8 lakhs. This can attract more investors to buy second homes, for earning rental income,” Puri adds.

    Increase In Standard Deduction For Salaried People

    Increase in standard deduction for salaried people, from Rs 40,000 to Rs 50,000, will result in higher disposable incomes. Therefore, it would translate into improvement in home loan EMI repayment capacity.

    This budget has broken the trend of avoiding major announcements in interim budgets, point out analysts. Nevertheless, there are a few areas that have not been touched and are expected to be covered in the full-fledged budget after the general elections. Some key expectations that remained unfulfilled, include an increase in the Section 80 (C) benefit for home loan borrowers, single-window system for clearances, inclusion of stamp duty in GST, etc.



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