Realtors body NAREDCO has demanded a boost to rental housing in the upcoming budget from the government through incentives like 10-year tax holiday to real estate developers on profit earned from the business.
"In view of the housing shortage in the country and the objective 'Housing for All by 2022' as also in view of the fact that all cannot afford ownership housing, we need to give a big boost to 'Rental Housing'," NAREDCO President Niranjan Hiranandani said.
In its budget wish-list, NAREDCO has recommended various incentives to promote rental housing in a big way.
It suggested that 10-year tax holiday be given to real estate developers on profits earned from rental housing.
That apart, the association sought deduction on expenses like interest and brokerage.
As customers prefer fully-furnished flats, NAREDCO said depreciation should be allowed on furniture and fixtures as well as on apartments.
"High cost of houses and high property taxes lead to a low rate of return (ROR) from rental housing, making renting out an un-remunerative proposition.
"To improve the effective ROR from renting, it is suggested that the deduction from rental income under Section 24(a) be increased from 30 per cent to 50 per cent. This will promote rental housing," NAREDCO said.
The association also said that the goods and services tax on maintenance charges of residentials complexes should be totally exempted.
CREDAI and NAREDCO are the two main associations of real estate developers across the country.
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