Change in home loan terms
According to a report in Financial Express, IMGC COO Anuj Sharma says that for home loans to be affordable, interest rates need to come down. Although the interest rates are based on the policies of the Reserve Bank, but through the budget, home buyers can be given some concessions in the rules related to home loans. “This could include provisions like reducing the required down payment or further easing the eligibility criteria for availing home loans,” he added. This will make it easier for home buyers to get finance.
Experts believe that the increase in interest rates can have a significant impact on the home loan and real estate sector. Because, the rise in interest rates is becoming a cause of great concern for the buyers. In such a situation, the government needs to increase the tax exemption on home loan interest. Under section 24(b) it can be increased from existing Rs.2 lakh to Rs.5 lakh. Sharma says that by giving tax exemption or concession to first time home buyers, it should be made easier for them to own their home.
Change in Affordable Housing Limit
Atul Monga, Founder and CEO, Basic Home Loans, says that the current limit of Rs 45 lakh for an affordable property is not appropriate for most cities in the country. According to him, it should be increased to Rs 75 lakh or more. Meaning, this will increase the limit of concessions available to people in the name of affordable housing and it will be easier for them to buy a house.
Experts are saying that the current GST framework for under-construction and affordable housing puts additional burden on the developers. Because of this, ultimately the buyers have to pay a higher price. The 18% GST on steel and 28% on cement increase the cost of houses and developers cannot claim tax credit on the GST paid on these items. To reduce this burden and make property affordable, the government may consider restoring input tax credit in the upcoming budget. Apart from this, by fixing 1% GST for under-construction projects and reducing the cost of raw materials like cement and iron, more and more people can be made available affordable houses.
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Promotion of rental housing
Anil Pharande, chairman of Pharande Spaces and president of CREDAI Pune-Metro, has said that rental housing in India is still comparatively underdeveloped. The development of this sector can be given attention in the general budget of 2023. For this, tax concessions should be announced to developers working on rental housing projects.