The 2017 Union Budget has been considerably in favor of the housing market. The budget provides concessions in time limits to the construction companies as well as to the homeowners. The amendments that have been done keeping the real estate industry in mind will affect the other sectors too.
Affordable Housing Has Been Granted the Infrastructure Status
The most prominent impact of the 2017 Union Budget on the real estate market would be because of the infrastructure status that has been granted to affordable housing. Now, the developer’s cost of borrowing for affordable projects will reduce, and they will have easy access to institutional credit. From April 2017, the approval process for these projects will also be simpler and more transparent. The result of all of these reliefs will be that more construction companies will be able to afford financing and will delve into the real estate market. As the construction increases, more people will be able to afford homes in different cities across India. This will also attract a lot of investment in this sector.
Reduction in Holding Period of Long Term Capital Gains
Apart from new constructions, the sale of old houses will also increase. With the reduction in the holding period of Long Term Capital Gains Tax (LTCG) for land and immovable assets, more people will be encouraged to invest in property. Therefore, more people will also be willing to liquidate these properties when in need of cash. The more the real estate options, the better it is for the common man.
Gramin Pradhan Mantri Awaas Yojna
The 2017 Union Budget focuses majorly on the development of real estate in the rural areas, and the 2-tier and 3-tier cities in India. The government plans to construct 1 crore homes in these areas till 2019 and has allocated Rs.230 billion to this project. This move will positively impact the real estate market in the smaller cities and towns in our country. This will aid in the overall development of these cities as the construction will bring in new job opportunities. This will also boost the sales of the goods, in all related industries, like plumbing materials, electronics, furniture, etc.
Refinancing Housing Loans
Owing to the recent demonetization, the banks have excess cash and keeping this in mind, the government has allocated Rs.200 billion towards refinancing housing loans. This will ensure that banks can give loans to more individuals at lower interest rates. Refinancing housing loans can also be beneficial for homeowners who have home loans with flexible interest rates. Reducing the monthly installment will help improve the financial status of homeowners and allow them to make more purchases or investments.
The real estate market that has been down for some time now has found some relief after the declaration of the 2017 Union Budget. It has been favorable to both, the builders as well as the buyers. If you have been thinking of investing in real estate in Mumbai or buying luxury villas in Bangalore, this is the right time do it.