Realtors seek changes in taxes on way to affordable housing

A group of realty players have urged the government to reduce various taxes saying that governments should play the role of facilitator to push affordable housing in the country.

Addressing the a session on ‘propelling residential developments in India’ at a seminar on building technologies in Bangalore on Wednesday, M R Jaishankar, managing director, Brigade Enterprises, said, “In addition to single window, tax breaks is another vital parameter to give a push for affordable housing and also utilise the expertise of private developers.”

The developers were of the opinion that the government should reintroduce Sec 80 I B of the Income Tax Act, which gives tax sops to developers, and also reduce multiplicity of taxes, stamp duties, VAT, service tax, and other duties and levies. “Currently tax component works out to about Rs 923 per square feet or about 32-37 per cent of the costs,” Jaishankar said.

He added that the government’s role is vital as about 20 to 25 million new families are expected to be in the Rs 0.2 million salary slab in the next two years and each family can afford Rs 1 million to Rs 1.2 million homes.

“Of these new families, 50 per cent are to come up in tier II and III cities and the balance from major metros,” he added.

Prakash Challa, manag-ing director, Srinivasa Shipping and Property Development Limited (SSPDL), said in addition to affordable housing, governments should pay attention to boosting rental housing.

The governments instead of auctioning its lands should look at taking up rental housing and to encash this private sector participation is necessary as they can bring necessary capital, he added.

Giving an example, he said Credai-Tamil Nadu has submitted a proposed to Tamil Nadu to initiate mass housing project on slum lands in Chennai city. Currently, slums occupy 200 acres in the city and Credai-Tamil Nadu along with Confederation of Indian Industry (CII) has submitted a proposal for joint development, said Challa.

“On these 200 acres, about 60,000 to 75,000 units of 300 square feet each is feasible with 2.5 FSI,” he added.