The affordable housing segment and infrastructure remained the key focus in the Union Budget 2019 presented by Finance Minister Smt. Nirmala Sitharaman. Here are some of the key announcements of what the Union Budget had in stock for the Indian Real Estate:
Tax Benefits: This year’s budget was dedicated majorly to the affordable housing segment. The budget proposed to decrease Rs 1.5 lakh on the interest paid on home loans for affordable housing till the 31st of March, 2020. But if the cost of the homes purchased exceeds Rs 45 lakhs, the scheme will not cover such homes. This proposal will not only benefit the middle-class first-time home buyers but also boost the housing sector. Since the majority of home buyers are from the low- and middle-income group, this proposal is anticipated to boost the demand for affordable homes.
Affordable housing: This year’s budget emphasized more on the affordable housing segment to boost the demand for ‘’Housing For All By 2022’’. To achieve this demand the government has announced to construct affordable homes on lands owned by central ministries through joint development. The government has further proposed to increase the carpet area from 30 square meter to 60 square meter in metropolitan cities and from 60 square meter to 90 square meter in non-metropolitan cities.
Infrastructure development: The government has planned to invest Rs 100 Crore in the infrastructural sector for the coming next 5 years to improve roads, railways and metro connectivity in the country. This initiative by the government in the infrastructural sector is anticipated to accelerate demand in the warehousing and logistics sector. In order to bring down the cost of road deployment, the government has further decided to construct nearly 30,000 km roads using recycled plastic.
Rental market: To boost the rental housing market and surge the interest of the investors the government has enacted new reforms under a new Model Tenancy Law which will be soon finalized and circulated to the states with several other reforms to further bolster the rental housing market. This step by the government will make this sector more organized and will bring greater transparency in the rental market.