Budget 2019: Govt Woke Up Late To Distress In Real Estate Sector
Video Producer: Hera Khan
Video Editor: Vishal Kumar
The perfect way to sum up Budget 2019 for the real estate sector would be to say better late than never.
This has been a sector where activity had come to a near halt. Buyers were wary of investing as they stood to pay GST on under-construction projects. Moreover, if an individual intended to 'buy and hold' and not put the home on rent, he/she had to pay tax based on notional rent, which has been done away with in this budget.
Presenting the interim budget, Piyush Goyal proposed to extend the benefit of self- occupied property to two houses via exemption of notional rent on second self- occupied homes.
Similarly, if an individual buys two homes upon selling one, he/she won't have to pay capital gains tax anymore.
Thus, if an individual has two houses and one is self occupied, he/she will not be charged income tax on the notional rent for the second house. Earlier, one had to pay income tax on the second property even if it was lying vacant, based on notional rent calculated as per tax rules.
The budget also seeks to extend the benefits under Section 80-IBA of the Income Tax Act for one more year - to housing projects approved till March 2020, which will boost supply of affordable housing.
The fact that real estate sector is in an extremely bad shape is a known one. The government has woken up late to the reality, now that their core vote base has shown signs of erosion in the recent assembly elections.