New Delhi, Jan 22: Realtors’ body NAREDCO on Thursday demanded that the government, in the upcoming budget, should enhance the deduction limit for interest on home loans to Rs 5 lakh from the current Rs 2 lakh, as well as provide industry status to further fuel the growth of the real estate sector.
The association also sought a change in the definition of affordable housing and suggested that homes costing up to Rs 75–80 lakh should be treated as affordable, as against the current price limit of Rs 45 lakh.
Focus on affordable housing
At 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 the affordable housing segment.
“We need to ensure Housing for All. Housing should get equal importance like any other infrastructure sector,” he added.
Hiranandani suggested that the government should utilise its own land for the development of affordable and mid-income housing.
Home loan deduction and rental housing
NAREDCO President Parveen Jain said the limit for deduction of interest on home loans should be increased to Rs 5 lakh in respect of self-occupied property, from Rs 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 realtors to build rental homes.
He said the government can provide tax incentives and other facilities to realtors to promote rental housing.
Demand for industry status
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 USD 1 trillion by 2030.
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Jain said homes priced up to Rs 80 lakh should be considered affordable housing. The change in definition would help, as the GST on affordable homes is just one per cent, he added.
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