The real estate sector is the second largest employer in India after agriculture. It is no secret that real estate faced a significant slowdown due to the coronavirus pandemic and the migrant workers’ crisis. Thus, stakeholders had high expectations from budget 2021 on real estate sector.
Finance Minister Nirmala Sitharaman made some favourable announcements in her 2021 budget speech. She has made several new provisions and increased investments to get the real estate sector back on its feet, but some significant opportunities were also missed. Let us look at the budget 2021 housing sector highlights below.
What the real estate sector gained
The FM has given major incentives to the real estate sector with a focus on improving investment.
Nirmala Sitharaman had announced an interest deduction of up to Rs. 1.5 lakhs in the 2019 budget. This provision has been extended for another year until March 2022 on a home loan taken to buy an affordable house.
Further, she has also extended the tax holiday on affordable housing projects for one more year, up to March 2022. This will create an incentive to launch more units under the affordable segment and make the loan more readily accessible.
Additional Read: Home Buying In 2021: Is It the Best Time to Buy A New House Now?
The Union Budget also introduced tax provisions to make affordable housing rentals more accessible for migrant workers. Now, workers will benefit from tax exemption on notified Affordable Rental Housing Projects.
The Ministry of Finance has approved of private investment formats like REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts). The move is expected to bring in more private participation in the sector and attract Foreign Portfolio Investors to augment the flow of funds in the Indian realty. And make better development and infrastructure possible in the sector.
What the real estate sector missed
Experts opine that the Union Budget 2021 hardly introduced any measures to meet the real estate sector’s demands. Apart from offering incentives on the payment of home loan interest rates and some tax reliefs, the budget failed to make any significant offers.
Many are of the view that providing industry status to the real estate sector would have been highly beneficial. This has been one of the oldest demands of the stakeholders, and gaining industry status would have enabled them to reduce the overall supply-side costs, making houses more affordable.
Additional Read: What Are the Things Home Buyers Should Expect from Budget 2021?
To sum up
There may be some disappointment for real estate builders, but aspiring home-owners should make the most of the current provisions and purchase a home. Finance your purchase by taking a loan from Tata Capital and obtain a loan amount of up to Rs. 5 crores.
Tata Capital provides a quick loan disbursal with minimum documentation. You can also use our EMI calculatortounderstand your monthly EMI payouts. Visit our website to check our home loan eligibility criteria today!