Expectations of Real Estate Consultants from Union Budget 2020!
Budget 2019 had left a severe impact on our Indian economic system and society as a whole. Because of the demonetization, we saw a large number of investments being made in the real estate and a whole lot of service sector and property dealings being affected due to imposition of GST. Thus, there has been a lot of speculation and expectations from Budget 2020. Following are a few points we can expect in our budget system in favour of real estate:
Single platform for approvals: Though this issue had been mentioned in the previous budget draft as well but hadn’t found its way yet. We believe this can be a thing of the Union Budget 2020 so as to make residential real estate clearance and approval at a faster pace than before.
Reduce Home Loan interest rates: Loans up to INR 12 lakhs have been given a boost with a substantially reduced rate of interest. This amount should be further increased in order to increase the demands in the real estate and benefit a group of a large class in general.
Reduction in GST: The current imposition of GST on real estate sector is 12%. In order to increase the sales margin and investments made in real estate, there is a need to further reduced the GST to 5%.
Reduction in stamp duty: An average middle-class consumer pays a decent amount tax which includes GST, stamp duty and other tax duties while the purchasing any real estate properties. At present we end paying more than 18% of tax duties (5-6% of stamp duty + 12% GST) which becomes expensive.
Claim tax deduction amount: As per under section 24 of Income Tax Act, 2017 we are allowed to claim the tax deduction of up to INR 2 lakhs for any loss against the house property. And, if the amount of loss exceeds 2 lakhs then it will be set off against any other rental income for the next 8 consecutive years. Also, according to section 80EE, the first-time buyers get an additional tax deduction of up to INR 50,000 on their first property purchase. So, it is possible that budget 2020 will raise the amount up to 5 lakhs in order to get to allow the taxpayers to set off the higher amount of loss.
With the Union Budgetary plans at the arrival, we might see the following changes in the system of real estate and the overall economy as a whole. If any of these are implemented, this would boost up the sale and investment in the estate business!