Stimulus 3: Know the benefits to the home buyers by the announcement of the Finance Minister | How will the finance minister's announcement benefit home buyers, how much profit will the builders make? Understand in simple terms ... » India News
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Stimulus 3: Know the benefits to the home buyers by the announcement of the Finance Minister | How will the finance minister’s announcement benefit home buyers, how much profit will the builders make? Understand in simple terms …

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  • Stimulus 3: Know the Benefits to the Home Buyers by the Announcement of the Finance Minister

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new Delhi8 hours ago

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  • Income tax relief opens way for sale of more than 6 lakh homes

Finance Minister Nirmala Sitharaman has announced a major relief for different sectors. An important announcement for the housing sector in these announcements is that the difference between the circle rate and agreement value has been increased from 10% to 20%.

Due to this, both the buyer and seller of the house will get a big relief in income tax. The government has also announced a fund of Rs 18,000 crore under the Pradhan Mantri Awas Yojana. Real estate experts believe that this will speed up construction work.

What has the government announced?

Finance Minister Nirmala Sitharaman has given a big relief to the house buyers and builders. The difference between the circle rate and agreement value was increased to 20% from the earlier 10%. The scheme, which remains in effect till 30 June 2021, will be applicable to the primary sale of residential units up to two crore rupees. This will reduce the prices of real estate and will provide relief to developers who are unable to sell their houses.

What do the builders say about the announcement?

National chairman of CREDAI, the country’s largest association of builders and developers, said in a conversation with Dainik Bhaskar that till now builders could not sell their properties at a cheaper price than the circle rate, because they were only according to the circle rate Income tax had to be paid. With the relief given by the government, the builders will be able to sell the house at a lower price than the circle rate. On the other hand, customers will also be able to get houses at cheaper rates.

Jakshay Shah explained by giving an example… if a builder has a flat of Rs 50 lakhs according to the circle rate. But, due to the slowdown in the market, it is not getting that much price. Even if he wants to sell this flat for Rs 40 lakh, he cannot sell it. The main reason for this was that on sale, income tax had to be paid according to the circle rate. Due to these reasons many people did not sell their property at a lower price than the circle rate and the property remained unsold. Earlier, if the property was sold at a lower price than the circle rate, it would have got tax relief of only 10%.

How will builders benefit?

Jakshya Shah said that with the announcement made by the government today, many inventory will now be cleared. Builders and developers will extract their stocks at low prices. Income tax will be less, so the builders will get the gap to reduce the price. This will encourage them to reduce prices. So far, the inventory in mid and high end properties is increasing. In view of this, this decision will reduce inventory rapidly. Apart from this, slowing economic activity in the property market will gain momentum.

Why would home buyers benefit?

If a person or family has liked a house and its price is 50 lakh rupees according to the circle rate. But, if he is finding this price a little higher, then according to the new rule, the builder will be able to sell the house at a lower price of up to 20% to the buyer. In this way, home buyers will get the house at some cheap price and also get relief in tax. If the houses are cheap, then shopping will also increase.

3.7 trillion unsold inventory sales will help

Ramesh Nair, country head and CEO of property consultant JLL, said that income tax relief will help clear $ 3.7 trillion of unsold inventory. The government has announced another Rs 18,000 crore under the Pradhan Mantri Awas Yojana. This year, it was announced to give Rs 8000 crore in the budget. This will give a big boost to 200 sectors related to the construction and real estate sector. At the same time, due to the talk of generating 78 lakh jobs, migrant workers will come back to the cities.

More than 6 lakh houses are sold in the country.

Anuj Puri, chairman of Enrock Property Consultant, says that around 5.45 lakh houses with prices up to Rs 1.5 crore and about 49,290 houses valued at Rs 1.5 to 2.5 crore are unsold in the main seven cities of India. By the way, more than 6 lakh housing properties are unsold in the country. The builder will pass the relief on income tax to his customers. Customers will also benefit from this. Affordable and mid-segment properties will benefit the most from today’s announcement.

Gujarat will benefit less

Balbir Singh Khalsa, national director of property consultant Knight Frank India, states that states like Gujarat will not get any special benefit from this decision. There has been no increase in the circle rate for the last 9 years, due to which the benefit of this scheme will not be available. Second, the property market in Gujarat has an affordable segment, which does not matter much with today’s decision.

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