It’s that time of the year when everyone is consumed with taxes and budgets. The financial budget of India impacts the real estate industry as much as any other industry. The government paid particular attention to revive the real estate industry with a lot of subsidies and moratoriums to benefit the customers and realtors. The Ministry of Housing and Urban Affairs has granted Rs 54,581 crore in the Budget 2021.
In terms of employment and revenue generation, real estate currently contributes about 8% of the nation’s GDP. In 5 years it is expected to grow to 13% of the GDP. Thus for those looking to buy apartments in Chennai, the revised budget looks quite promising to make it a good investment.
Major incentives to the real estate industry:
The Government proposed two major incentives to the real estate industry that was a welcome move. The first was to provide tax benefits to affordable housing and private investment formats like the Real Estate Investment Trusts (REITs), and Infrastructure Investment Trusts (InvITs). The tax exemption was also extended till March 31 of 2022.
The tax exemption also includes a reduction in the interest on loans taken towards affordable housing. The tax exemption extended to a further 1.5 lakhs for the purchase of homes, priced within 45 lakhs. The eligibility period for this exemption is till March 31 of 2022. In a move to incentivize both investors and realtors, the safe harbor limit has been increased from 10% to 20% in the sale of residential units like apartments in Chennai. The Finance Ministry also proposed that affordable housing projects can enjoy the tax exemption till March 31 of 2022. This exemption also included affordable rental housing for migrant workers.
The second incentive was that the finance ministry provided stimulus to both REITs and InvITs, with deductions on the TDS. Further the plan was to make these investments accessible to the common man, the ministry allowed foreign portfolio investors for debt financing of the investment trusts. This will allow more flow of funds from private investors into the real estate industry.
Infrastructure development in Chennai:
The budget also contained a sizeable chunk of funds dedicated to the Chennai Metro Rail project. The Phase II of the CMR project has been allocated Rs. 63,246 Crores to construct a metro line of 118.9 km. This metro line will pass through several prominent areas of Chennai. This will create an impact on the property rates in the surrounding areas. The closer your new home lies to a metro station, the higher the appreciation of the property rates. You can check out the Lifestyle Housing apartments in Chennai located in proximity to the Metro projects for great value on your investment.
Expected measures in further budgets:
Right now real estate is recognized as a sector and not as an industry in itself by the Indian Government. If it is granted industry status, then loans can be acquired at lower interest rates, it will attract more equity investments, and developers can refinance debts. This will prevent construction work from getting interrupted by a shortage of funds. Thus the people investing in apartments in Chennai can consider it a safe investment.
Lifestyle Housings has premium residential projects with 4 BHK apartments in Chennai. The budget has facilitated more investment in real estate and the infrastructure projects show great promise for property value appreciation in the coming years. Take the lead and visit our projects for investing in your future.