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Budget 2021: The Real Estate Expectation

Loknath Das December 18, 2021 Real Estate Comments Off on Budget 2021: The Real Estate Expectation
Budget 2021: The Real Estate Expectation

Tax benefits for affordable housing and private investment formats such as Real Estate Investment Trusts and Infrastructure Investment Trusts (REITs and InvITs) have been some major reasons for the realty sector to witness such growth despite the pandemic in 2020. The tax exemption benefit and interest deduction on loans has been proposed to be extended by another year until March 2022.

Tax exemption for Affordable Rental Housing Projects to make rental homes more reachable to aid migrant workers is a genuinely commendable move which shall make renting homes easier for them.

The Finance Minister Nirmala Sitharaman has incentivised the REITs and InvITs with the exemptions on TDS (tax deducted at source) that counts for a step taken with greater foresight. She has also given projection for permission of foreign portfolio investors for the public in order to increase participation and cash-flow into the real estate and infrastructure sector.

Indirect measures to assist the realty sector to boost capital appreciation of local properties is also being proposed by the FM which includes adding funds to infrastructure development.

Measures We Anticipated for Inclusion


2020 has been a disappointing year for the economy globally and while the financial markets where drowned, real estate has been the only one to gain momentum by the third quarter. Despite such performances, real estate has still not been given industry status even now when liquidity can be immensely helpful in recovering from the pandemic-related impediments. Doing this would be beneficial to the NBFCs, HFCs and banks to regain NPAs resulting in the overall profit of the entire economy. This would have been extremely profitable for the developers to refinance their outstanding.

Rational capital supply, access to funds and longer repayment cycles are some more measures that developers were looking forward to.

With common people diving deeper into real estate investing, it was also expected to extend benefits given to REITs to shared or fractional ownership that would eventually attract more investments in the commercial realty sector.

Tax benefits for affordable housing and private investment formats such as Real Estate Investment Trusts and Infrastructure Investment Trusts (REITs and InvITs) have been some major reasons for the realty sector to witness such growth despite the pandemic in 2020. The tax exemption benefit and interest deduction on loans has been proposed to be extended by another year until March 2022.

Tax exemption for Affordable Rental Housing Projects to make rental homes more reachable to aid migrant workers is a genuinely commendable move which shall make renting homes easier for them.

The Finance Minister Nirmala Sitharaman has incentivised the REITs and InvITs with the exemptions on TDS (tax deducted at source) that counts for a step taken with greater foresight. She has also given projection for permission of foreign portfolio investors for the public in order to increase participation and cash-flow into the real estate and infrastructure sector.

Indirect measures to assist the realty sector to boost capital appreciation of local properties is also being proposed by the FM which includes adding funds to infrastructure development.

Measures We Anticipated for Inclusion


2020 has been a disappointing year for the economy globally and while the financial markets where drowned, real estate has been the only one to gain momentum by the third quarter. Despite such performances, real estate has still not been given industry status even now when liquidity can be immensely helpful in recovering from the pandemic-related impediments. Doing this would be beneficial to the NBFCs, HFCs and banks to regain NPAs resulting in the overall profit of the entire economy. This would have been extremely profitable for the developers to refinance their outstanding.

Rational capital supply, access to funds and longer repayment cycles are some more measures that developers were looking forward to.

With common people diving deeper into real estate investing, it was also expected to extend benefits given to REITs to shared or fractional ownership that would eventually attract more investments in the commercial realty sector.

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