Naredco budget wishlist: Industry status, hike in home loan interest

Realtors' body Naredco on Thursday demanded that the government in the upcoming budget should enhance the deduction limit for interest on home loans to ₹5 lakh from the current ₹2 lakh, as well as provide industry status to further fuel the growth of the real estate sector.

The association also sought change in the definition of affordable housing and suggested that the homes costing up to ₹75-80 lakh should be treated as affordable as against the price limit of ₹45 lakh..

In a press conference held here, Naredco Chairman Niranjan Hiranandani said the Centre has undertaken various measures to support the real estate sector but there is a need to do more for affordable housing segment.

 

"We need to ensure Housing For All. Housing should get equal importance like any other infrastructure sector," he added.

Hiranandani suggested the government should utilise it own land for development of affordable and mid-income housing.

Naredco President Parveen Jain said the limit for deduction of interest on home loans should be increased to ₹5 lakh in respect of the self-occupied property from ₹2 lakh currently.

He also demanded that the government should promote rental housing by providing the right incentives to real estate developers.

Jain pointed out that the rental yield in the housing segment is very low at 1-3 per cent, making it unviable for the realtors to build rental homes.

He said the government can provide tax incentives and other facilities to realtors to promote rental housing.

Jain said the association has been demanding industry status for the real estate sector for a long time, as this would help in getting cheaper loans for all inputs, including land and other raw materials for construction.

Considering the sector's contribution to India's GDP and employment creation, the Naredco President said it is high time that the government provide industry status to the Indian real estate sector, which is estimated to reach $1 trillion by 2030.

Jain said homes up to ₹80 lakh should be considered as affordable housing. The change in definition would help as the GST on affordable homes is just one per cent, he added.