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The blokes who come up with the homebuyer sentiment and housing demand numbers must be congratulated, because when they promised that housing would recover through 2021, they were spot on.
While housing sales are expected to be robust through 2022, the pandemic among other things, has pushed hard on input costs, eroding profitability.
This means that the real estate sector is expecting the Union Budget 2022 to create some breathing space for it first, and then fuel growth.
Here are the top requests to the FinMin (again):
📢 Upgrade Status: Granting the status of ‘infrastructure’ has been an age-old ask of the sector and it's a primary expectation from Budget 2022 again. While infrastructure status has been accorded to affordable housing, expanding it to all categories of assets in real estate will attract investments from large pockets of sovereign wealth funds /pension funds who have been granted tax exemption on income streams from ‘infrastructure’ investments. [⚠Not addressed in 2021]
📢 Revise Income Tax Exemption: Currently, concession can be availed in income tax on up to INR 2 lakhs paid as interest on home loans. This should be revised and increased to improve demand for housing. [⚠Not addressed in 2021]
📢 Revise GST On Raw Materials: With rising cost of raw materials, more so since the pandemic began, the real estate sector has been asking for a reduction on GST levied on commodities like cement, steel, tiles, metals and others, to help check the unnatural spike in construction cost. [⚠Not addressed in 2021]
📢 Reduce Shared Economy TDS: Because most of the receivables from an occupier is towards services, there is a request to bring coworking spaces under the ambit of a 2% TDS slab as in the case of services, from the present 10%. [⚠Not addresses in 2021]
📢 Miscellaneous Notes: A GST waiver for under-construction properties, incentives for private investment in the affordable housing sector, easing of liquidity, and short term tax holidays are on the wish list too. [⚠Not addressed in 2021]