Sankey Prasad
Sankey Prasad, Chairman and Managing Director of Synergy Property Development Services
With implementation of RERA, REIT and GST last year, the real estate sector continues to be in the limelight this year. Now, the builders are looking forward to the upcoming budget, where they are expecting certain announcements to provide impetus to the sector.
The biggest expectation from this Budget would be inclusion of the sector in entirety under the GST regime, and not just the properties under-construction, as is the case now.
Also, it is expected that the budget will cut down the long term capital gains holding period for REITs from three years to one year. This would bring the investment opportunity at par with equity investments and would make REITs more palatable to investors.
While the Government has already taken several steps to make housing affordable, truly speaking, affordability is still an issue in India due to high real estate prices as builders and high net worth investors refusing to divest their inventory. The Budget could introduce a certain percentage of tax on holding on to inventory after all aspects of building construction are complete, and the occupancy certificate has been obtained. Real estate sector may be granted ‘industry’ status, which will help the sector to access long term financing at lower cost.
The recent move allowing 100 per cent FDI under automatic route in construction development, by the government, is a growth driver for the country, as there is no any government approval required for the overseas investors.