Post the announcement of demonetization, the affordable housing segment of the Gurgaon real estate experienced a considerable downfall in terms of reduced demand, increased supply and depreciation of the land’s value. However, unlike the other sectors of the economy, the real estate market of the nation is expected to witness a boost again as the prices of land will escalate to new heights in the upcoming years.
Amid all this, a lot of policies have changed which will affect the real estate market. These are as follows:-
- An amendment made to the Benami Transactions Act.
- Real Estate (Regulation and Development) Act, 2016.
- The introduction of 100% deduction in profits for the construction of affordable houses.
- Interest subsidy for first-time home buyers has changed.
- A change in arbitration norms for the construction of companies.
- Exemption of service tax to affordable housing developments.
- DDT exemption for SPVs to REITs.
- Implementation of the Goods and Services Tax structure in the real estate segment.
- For foreign investors – introduction of the status of permanent residency.
- Demonetization of 500 and 1000 rupee notes.
Policy Changes to Boost Real Estate
Many Gurgaon real estate developers claim that the above-listed policy changes made during 2016 will, in a way, help the sector than to harm the business. Some builders even emphasize on the fact that the policy changes have typically worked in favor of the developers as well the home-buyers.
The crash in the price of property in Gurgaon ready to move in and under construction has enabled many potential buyers to plunge in and make their dream of having a house come true. The exemption of service tax against the development of affordable houses (upto 60 square meters) under any state or central government scheme, including the PPP scheme, has augmented the affordable housing sector and even encouraged the public and private players to collaborate and deliver projects.
The Impact of GST
While most of the policies mentioned above have been welcomed with open arm by the real estate developers, the impact of two policies are yet to be analyzed – GST and demonetization of high-value currency notes. Taking about GST, the officials still lack clarity on whether real estate will be placed in the category of ‘sin’ or ‘common use’ and the tax rates which it will attract – will it remain at 18% or go higher.
The changes though have been a major matter of concern at the moment, but most of them are being welcomed with a smile. The more interesting thing will be to see new developments in these policies in 2017.
Property Sale Gurgaon Meerut Karnal 