No tax relief for home buyers stuck in stalled projects, says FPCE

There was no relief for existing home buyers who are stuck in stalled projects and are paying both rent and EMI on their home loans, said Abhay Upadhyay, president of Forum for People's Collective Efforts (FPCE), earlier known as Fight For RERA.

New Delhi: Homebuyers association FPCE on Monday said the Budget has not provided any major tax incentives for flat owners stuck in stalled housing projects as well as prospective customers to revive confidence in the property market.

There was no relief for existing home buyers who are stuck in stalled projects and are paying both rent and EMI on their home loans, said Abhay Upadhyay, president of Forum for People's Collective Efforts (FPCE), earlier known as Fight For RERA.

"Real estate sector is yet to reach anywhere near its past high despite all tax sops provided in the previous year's Budget. This is partly because tax sops have failed to infuse confidence in the sector and also because many of the tax benefits provided remain on paper only," he said.

There were expectations that the Budget would separately provide a deduction for principal repayment on a home loan, which currently is part of Rs 1.5 lakh allowed under Section 80C, Upadhyay said.

"To infuse confidence in the sector, it was also expected that some tax relief would be provided to those home buyers of delayed projects who are paying both EMI and rent. Unfortunately, no such concessions were announced in the Budget 2020 which may further delay much-needed recovery in the sector," he said.

Last year, the Centre had created a Rs 25,000 crore fund for completion of stalled housing projects, comprising of about 4.5 lakh units. FPCE had been demanding the creation of a Rs 10,000 crore stress fund.

Real estate developers' apex bodies CREDAI and Naredco have also expressed disappointment over the Budget as their demand for one-time restructuring of builders' loan was not met.

However, many realty firms welcomed the government's decision to extend tax incentives provided for increasing demand and supply for the affordable housing segment.

"Notable developments in infrastructure, rural logistics, education and healthcare sectors will create opportunities in real estate space. The policy on data centres was a key highlight and will make it a sunrise sector in India. Major announcements for the housing sector were expected, and barring the extension on both the tax holidays and the time period for availing interest deductions in affordable housing, the highlights on Indian realty was relatively mute," Cushman & Wakefield country head and MD- India, Anshul Jain said.

RICS South Asia MD Nimish Gupta said the Budget should have created a formal structure around rental housing and encouraged home buying by increasing the tax exemption for housing loan repayments.

Among developers, Supertech Chairman R K Arora said the government's decision to extend an additional Rs 1.5 lakh deduction for interest paid on affordable housing loan to March 2021 is good for the sector.

Omaxe CEO Mohit Goel said: "Liquidity and availability of finance is the biggest issue confronting the real sector today. In this context, the assurance given by the FM that NBFCs (Non-Banking Financial Companies) and HFCs (Housing Finance Companies) will not face any liquidity crunch will help calm nerves for sure."

Ashiana Housing Joint MD Ankur Gupta said the middle income and affordable housing segment will get a boost.

Chintels MD Prashant Solomon said, "Affordable housing segment has got a boost with the FM proposing to extend the tax holiday by one more year. However, the Budget leaves much to be desired for the real estate segment."

Sunny Kataria, VP-Real Estate, OLX India said, "There were many expectations from the union budget in 2020 for residential real estate. While the government has furthered its commitment to affordable housing, many issues remain unresolved."

Bhutani Infra CEO Ashish Bhutani said that the focus on infrastructure and economic growth in the budget will lead to more activity at the commercial segment as the demand for offices will grow.

Gera Developments MD Rohit Gera said, "The move to provide more money in the hands of the taxpayers and elimination of the dividend distribution tax is welcome steps but the rationalisation of direct tax structures over the period has not provided the necessary stimulus needed to boost the real estate. The sector will see a slow recovery with more pain for many home buyers and developers."

Property brokerage firm Realistic Realtors Chairman Harinder Singh was unhappy that not much has been done to increase housing demand.

Migsun group MD Yash Miglani said the Budget has focussed on increasing overall economic growth.

Co-working firm Skootr founder Ankit Jain said, "Setting up an investment clearance cell and a digital portal aimed at offering assistance to emerging entrepreneurs reflects the government's proactive measures in further enhancing the entrepreneurial spirit."

AlphaCorp CFO Santosh Agarwal and Mapso Director Rahul Singla hailed extension of tax sops on affordable housing.

(PTI Report)