Realty developers seek more sops

Realty developers seek more sops
The Hindu Business Line, July 31, 2009, Page 14

Our Bureau, Mumbai

The Confederation of Real Estate Developers Associations of India, while welcoming the subsidising of home loans and extension of tax holidays for projects by the Government, said incentives to developers were disappointing.

Mr. Santosh Rungta, President, CREDAI, said the tax holiday under 80 I B (10) for a mere year to projects approved by March 2008 would not bring about any significant impact on the real estate market and could, at best, benefit a few micro markets.

Moreover, it would create unequal competition among developers as projects approved after March 2008 would not qualify for the incentive.

The real estate sector would only benefit if the tax holiday was extended up to March 2012, he said, adding that it would encourage developers to take up new projects and expedite ongoing ones.

The interest subsidy of one per cent to home loan borrowers for Rs 20 lakh home loans was not adequate.

construction cost

Taking into account the escalation of construction cost, which have resulted in higher property value, it should be hiked by one or two per cent and the scheme extended for loans up to Rs 30 lakh.

Mr Rungta said the housing and real estate sector could substantially contribute to growth rate if more incentives were given for purchase of affordable homes.

Referring to the focus on slum development, he said expectations were that the Government would exempt (slum redevelopment) projects from direct and indirect taxes.