Sitting on 600,000-700,000 of unsold units due to poor demand, cash-starved real estate developers heaved a sigh of relief after the government extended the tax waiver on notional rent on such flats for two years from one year earlier.
Developers and consultants feel that this budget proposal would benefit developers of major 7-8 cities, particularly those from the national capital region (NCR) and Mumbai Metropolitan Region (MMR) where unsold units are maximum.
Finance Minister Piyush Goyal proposed to extend the period of exemption from levy of tax on notional rent on unsold inventories from one year to two years. The period would be counted from the end of the year in which the project gets completed.
Commenting on this proposal, ANAROCK Chairman Anuj Puri said: "This is a welcome move and will benefit the housing sector, as currently there are more than 673,000 unsold units across the top 7 cities. "Delhi-NCR has 1,86,710 of unsold units while MMR has 2,19,490 units.
Motilal Oswal Real Estate Fund Head Sharad Mittal said this would give the developer community breathing space to sell off their unsold inventory in a tough market. Mahagun Director Dhiraj Jain said this is a relieving step for developers, while Sumadhura Group CMD Madhusudhan G said this proposal would give "slight relief".
Apart from this, realtors hailed decisions like exempting tax on income up to Rs 500,000 and incentives provided on the purchase of the second home.
"This budget is largely centred on the middle class. I am hopeful of some of this increased disposable income aiding the purchase of real estate and hence increased demand for the sector," Century Real Estate MD Ravindra Pai said.
Gaurs MD Manoj Gaur and Gulsan Homz director Deepak Kapoor said the proposal of full tax rebate up to an income of Rs 500,000 would increase the purchasing power of people who may now decide to buy homes.
Prateek group chairman Prashant Tiwari supply of affordable housing will improve with the extension of 100 per cent deduction of profits provided to realty companies developing such projects until next fiscal.
Ajnara CMD Ashok Gupta said the step of increasing income tax exemption limit to Rs 500,000 will help people to fulfil their dream of having their own home.
Signature Global Chairman Pradeep Aggarwal said the supply of affordable housing would improve with government extending the deductions announced under Section 80IBA until next fiscal. Square Yards CEO Tanuj Shori said the Budget has lent a helping hand to the real sector and eased some of the pain points.
Tulip Infratech CMD Parveen Jain termed the Budget as buyer-friendly with the announcement of tax rebates.
Chintels MD Prashant Solomon said, "The election-year budget has brought some relief to the real estate sector and we can look forward to some better times considering that our sector is one of the biggest job providers."
Hawelia's Chairman Rattan Hawelia said the budget has partly addressed the challenges of the housing sector and given relief to home buyers which is good for builders.
Rustomjee's CMD Boman R Irani said, "The budget announcement has been affirmative by opening the investment market for second homes. The government's proposal to extend the period of exemption from levy of tax on notional rent, on unsold inventories, from 1 year to 2 years is a good rational move."
Puranik Builders CMD Shailesh Puranik said: "The extension of one year on income tax on notional rent from unsold houses and no tax on notional rent on the second self-occupied house is expected to provide respite to the realty market."
ASF's CMD Anil Saraf said the interim budget has focussed on right areas to alleviate the stress in the housing sector and boost demand. PropEquity MD Samir Jasuja said this is a very positive budget for real estate.
RICS MD South Asia Nimish Gupta said, "While this has been an interim budget, it has been heartening that the real estate sector, in particular, will see the silver lining."
Ruparel Realty MD Amit Ruparel said the interim budget provides ample opportunities for people to invest in property.
India Mortgage Guarantee Corporation CEO Mahesh Misra said the tax concessions on unsold inventory to developers coupled with benefits to 2nd home buyers should bring the investment cycle back in the housing sector.
Synergy Property Development Services CMD Sankey Prasad said the steps taken could percolate into direct & indirect benefits to the housing sector.
Sumer CEO Rahul Shah said the budget saw sops being rolled out for the middle class and house-owners, while Sowparnika Projects and Infrastructure MD Ramji Subramaniam said the budget will definitely benefit both the affordable housing sector as well as homebuyers.
Krypton Global Investments MD Mona Jalota said the budget looks very positive and could give a huge boost to the realty sector. India Assetz founder Shivam Sinha said: "Populist and buoyant in the true sense, Budget 2019 has brought great cheer for the real estate sector".
Home & Soul CEO Sakshi Katiyal said the tax relief on notional rent from unsold houses will let developers not to compromise on their deals, while Wealth Clinic director Amit Raheja expected housing demand to rise with increased disposable income with people.
Neh Srivastava, President of Central Secretariat Service Officers Society (CSSOS) said this budget has offered many incentives to home buyers and developers.
No Broker.com co-founder Saurabh Garg said the budget proposals will lower the burden on homeowners, tenants, and developers, thus stimulating the growth of the real estate sector. Realistic Realtors MD Pankaj Jain said income tax rebate is a clear indicator of bringing more people under taxpayers category.