To revive the struggling real estate sector in a context of a global pandemic, the Minister of Finance Nirmala Sitharaman announced some measures in Union budget 2021. In order to stimulate growth and consumption, Sitharaman has extended the tax exemption on affordable housing for one year.

“This government considers ‘housing for all’ and affordable housing as priority areas,” she said during the presentation of the 2021 budget. In the budget of July 2019, the central government granted an additional deduction of ” income tax of up to ??1.5 lakh for home loans to buy affordable housing. Sitharaman has extended the eligibility of this tax deduction until March 31, 2022.

In order to ensure affordable housing for migrant workers, the Minister of Finance also announced the one-year extension of the tax holiday for affordable rental housing projects. In Budget 2020, developers of affordable housing were granted a one-year tax holiday.

“As expected, affordable housing and rental housing have received a big boost with the government extending the additional deduction period of ??1.5 lakh available for loans until March 31, 2022. This will also maintain the demand for affordable housing in 2021. In addition, the one-year extension of the tax holiday for affordable housing projects will help attract more new deals in this segment, ”said Anuj Puri, President of ANAROCK Property Consultants.

“The support announced today by the FM for rental housing will also go a long way in stimulating the real estate market and alleviate many pressure points in the rental housing market. It will also help migrant workers to a large extent and support staying in subways and other major cities during times of financial hardship such as that presented by the COVID-19 pandemic, ”said Dhruv Agarwala, Group CEO, Housing. .com, Makaan.com and Proptiger.com.

“The reduced steel tariffs to 7.5% will create a space for real estate developers who may not be able to raise prices immediately,” Puri added.

“The proposed debt financing for REITs and InvITs, and the establishment of the Development Finance Institution to increase funds for the infra and real estate sector are expected to provide a boost to the sector and will attract more investments in the sector ”, says Agarwala

Affordable housing projects are primarily government-driven real estate arenas with the goal of providing housing for all. “The government’s decision to extend the tax holiday for affordable housing projects by one year is a step in the right direction to realize the Prime Minister’s dream of ‘Housing for all by 2022”, “said Kaushal Agarwal , Chairman of The Guardians Real Estate Advisory.

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