NEW DELHI: Realtors’ body CREDAI expects the government to allow debt restructuring of cash-starved developers and tax incentives for homebuyers as part of measures to boost housing demand.
“We have high hopes from the Budget to be presented on Saturday. We have demanded restructuring or rollover of developers’ loan, steps to increase residential property demand and a policy to promote rental housing. We believe that our demand will be considered positively,” CREDAI National Chairman Jaxay Shah said.
He said loans up to Rs 1 trillion are required to be restructured in view of liquidity crunch faced by builders.
“Liquidity shortage continues to cause distress in real estate. Hence, a one-time restructuring scheme with moratorium on principal and interest of 2 years is immediately needed,” CREDAI President Satish Magar said.
Naredco has also been demanding restructuring of loans or one-time rollover in case of the stressed assets at the options of banks. In such cases, the borrower will retain the asset classification of the restructured standard accounts as standard and the same will not be treated as non-performing assets (NPAs).
Anarock Chairman Anuj Puri said there is a need to lower GST rate on under-construction flats to 2 per cent from the current 5 per cent, apart from tax incentives to boost purchase of homes.
“While real estate has attracted investment over USD 6 billion in 2019, however the government should take more steps to ease and widen domestic/international fund flow, fasten approvals/clearances, provide incentives to aid use of technology to allow faster construction and launch some skill development programmes specifically aimed towards RE (real estate), which is the second largest employer in the country,” said Anshuman Magazine, chairman & CEO (India, South East Asia, Middle East & Africa), CBRE.
Knight Frank India CMD Shishir Baijal sought further deduction on the principal repayment of housing loans under Section 80C.
JLL India Country Head and CEO Ramesh Nair said the Union Budget is an effective tool that can be used by the government to bring in more demand-side interventions to incentivise the homebuyers who are crucial for the revival of the sector.
Dhruv Agarwala, Group CEO of PropTiger.com and Housing.com, said, “Immediately, the biggest challenges confronting the real estate sector are liquidity and demand. While the Rs 25,000 cr stress fund/AIF (alternate investment fund) that was announced earlier is likely to solve part of the liquidity crisis, there is an urgent need for a one-time loan restructuring for the sector.”
He said the restructuring would provide significant relief to developers and lead to faster completion of projects.
To push demand, he said the government should consider lowering the tax burden on individuals to put more money in people’s hands and also consider providing an additional tax deduction on purchase of a second house.
Omaxe CEO Mohit Goel demanded a one-time loan restructuring for the sector. “This will speed up construction, and once construction begins in a full swing, not just consumer confidence but also sales and overall economy will see an upswing.”
Prashant Tiwari, chairman, Prateek Group, and president, CREDAI Western UP, said, “One-time loan restructuring permission should be granted for real estate loans. Give infrastructure status to the real estate. Reduce the GST for under-construction projects. These changes in the policy will help to revive real estate.”
Honeyy Katiyal, founder of Investors Clinic, said the limit of Rs 45 lakh to avail reduced GST rates of 1 per cent for affordable housing should be increased to Rs 65-75 lakh.
Online marketplace FindMyCowork.com’s co-founder, Dushyant Sinha, said that the commercial real estate sector has been performing well, especially co-working segment, so the Budget should provide tax incentives for property buyers who want to own office and retail space.
Paras Arora, chief executive officer and founder of Qdesq, said the co-working industry relies solely on equity infusion from investors for fund growth and demanded that the options for bank and financial institutions funding for recognised co-working start-ups should be provided.