With demonetisation, RERA, and the COVID-19 pandemic, the real estate sector has undoubtedly endured several bouts of pain these past few years.
However, with relief measures introduced in Budget 2021, and the historically low home loan interest rates, the real estate sector was able to bounce back, albeit not to the pre-COVID levels. Now, with Budget 2022 right around the corner, real estate investors, homebuyers, and developers can expect new measures to be introduced, which will further ease the tension built up in the sector.
According to the speculations, real estate budget 2022 affordable housing will lean heavily towards providing relief to the affordable housing sector. Here are some reasons why.
Extension of PMAY deadline
In December 2021, the Cabinet approved the extension of PMAY-G (Pradhan Mantri Awas Yojana-Gramin) till March 2024. The continuation of the scheme ensures that the remaining 1.55 crore households are within the earlier target of 2.95 crore houses under PMAY-G. This will go a long way in achieving the ‘Housing for All’ objective.
Tax exemption for rental projects
According to budget expectations 2022 for affordable housing, the Government is also expected to promote affordable rental housing schemes during this budget hearing. It is likely do this by providing tax exemption for rental housing projects. This will undoubtedly accelerate the investments in the rental scheme, allowing the projects to fall in line with achieving the overarching “Housing for All” objective.
Additional Read – Reasons Why Affordable Housing is Important in India
The liquidity crunch has had a waterfall impact across several Indian sectors, including the affordable housing sector. The most significant fallout of the cash crunch – project delays – has negatively impacted buyer sentiments. To solve this problem, developers need adequate capital flow to match the demand with supply.
Luckily, there have been talks about improving this situation, which will probably be addressed come February 1, 2022, at the Union Budget hearing. Most probably, the Government will forward financial grants to distressed affordable housing developers or will pave the way for easier loan borrowing for the same.
Recommendations by developers
Realtors have also made many suggestions, one of which is the extension of the CLSS scheme under PMAY for the middle-income group till December 31, 2022. Besides that, developers have also sought to increase the value limit on houses to Rs. 75 lakhs in non-metros and Rs. 1.50 crore in metros, from the previous ceiling value of Rs. 45 lakhs.
There have also been petitions to increase the size of the houses by 30 sq. metres in both metros and non-metros. Other than that, the developers are also looking for deduction of loss under house property, tax reductions on rental housing, and relaxation in REIT provisions for commercial real estate.
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With the many suggestions from realtors, problems in the affordable housing sector, and previous developments, it’s safe to say that affordable housing will take centre stage in Budget 2022.
Whatever the result is, there’s no doubt that homebuyers will have many benefits to look forward to after the budget hearing. So, if you are looking to invest in the affordable housing market, we at Tata Capital have the right home loan for you.
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