Interim Budget 2019: Top announcements for the real estate industry
Feb 28, 2019
The real estate sector has been abuzz since the 2019 interim budget was announced. In a much-needed relief for real estate, the interim budget seems to have brought momentum to housing. Post witnessing a prolonged lowdown for quite some time, here are some measures that would prove to be beneficial for the real estate segment:
Tax exemption on notional rent attracts second home buyers
According to the interim budget 2019, investors will no longer be charged tax on the notional rental income from their second house property, whether it is rented out or not. This move is likely to rejuvenate interest for investments in second home
Roll over on capital gains extended to two properties
According to the old guidelines, a home owner was exempted tax on capital gains of a sold property, only against a single property purchase. However, the interim budget 2019 allows the capital gain benefit to be rolled over to two residential home purchases for up to Rs. 2 crores, under section 54 of the Income Tax Act. Although this benefit can be availed only once in a life time, it’s an opportunity that investors wouldn’t want to miss.
Extended tax benefits make more affordable homes available to buyers The interim budget 2019 extends the benefits under Section 80-IBA of the Income Tax Act for one more year to the housing projects approved till 31st March 2020. This only encourages developers to undertake and complete more affordable housing projects and pass on the benefits to the buyers.
Reduced worries for unsold properties
The interim budget 2019, extended the period of exemption on levy of tax on notional rent related to unsold properties. The extension was made from one year to 2 years from the date of project completion. As per market experts, there are about 6-7 lakh unsold units in top cities of India and this extension brings relief to a lot of developers.
In the first of many, the government addressed several withstanding issues and made some big announcements pertaining to the real estate sector. Although they might come as a relief for the common man, how the government plans to execute each of these initiatives with immediate effect will be worth watching out for.