News Point: Track2Realty pan-India survey finds that homebuyers wish the Union Budget should encourage first time homebuyers and put riders for the retail investors buying more than one house.
The Indian homebuyers are quite convinced that whatever incentives are given to them in the Union Budget, it will never reach to them. Reason: There are enough investors and middlemen in the Indian housing market to absorb the budget benefits. And hence, they demand a combination of incentives and penalties to make sure that the government’s oft-repeated commitment of ‘Housing for All’ becomes a reality.
This speaks volumes about today’s discerning homebuyers or whom more than the tax reforms and more than the much-awaited GST, what is even more important in the Union Budget is to have the differentiation between the home buyers and the retail investors. They are quite convinced that the wealthy Indians acting as investors are the biggest road block in dream of ‘Housing for All’.
Nearly eight out of ten, 77 per cent demand more incentive for first time buyers. They assert that the incentive should not be passed on to the second time buyers or the repeat buyers. The general mood of the nation is that this is one way to ensure end users are incentivized while the investors are kept at bay. A substantial number of home buyers, as many as 70 per cent even recommend more taxes to the second and third home buyers.
The homebuyers across the country even feel that the budget should encourage more rental housing in the major cities of India. Nearly two third, 62 per cent, think this is one of the ways to keep the housing crisis in check. And hence, the Indians demand heavy penalty (at least up to the renal value of the apartment) to the scores of purchased and locked houses in the cities.
Homebuyers’ budget wish list
- 77% homebuyers demand more incentive for first time buyers
- 70% buyers recommend more taxes to the second and third home buyers
- 62 per cent think tax incentive to fist time buyers and additional taxes to repeat buyers would be deterrent to retail investors
- 92% demand simplificati0n with the taxation of house purchase where any infinite delay in construction should not deprive them with the legitimate tax rebate
- 54% buyers feel additional tax incentive of Rs. 50,000 for houses up to Rs. 50 lakh announced in the last budget is not enough in most of the metro cities of India
- Buyers demand the incentive cut-off to be houses worth Rs. One crore to be eligible for getting additional tax exemption
- 72% feel demonetization won’t make houses cheaper
- 68% feel the negative publicity with the demonetization and the reported loss to the Indian economy on the eve of elections in five states will force the government to dole out something for the home buyers in the upcoming Union Budget
- 58% homebuyers demand the Finance Minister to clarify taxes post GST in the upcoming budget
These are the findings of a pan-India survey by Track2Realty, the real estate think-tank group. Track2Realty conducted this survey post the 50-Day cut-off date after the demonetization was announced. The survey was conducted in Delhi-NCR, Mumbai, Pune, Ahmedabad, Bangalore, Chennai, Kolkata, Hyderabad, Chandigarh and Lucknow.
The idea was to have a comprehensive understanding of the home buyers wants & needs with regard to the Union Budget 2017-18. A mix of open-ended and closed-ended questions were given to the respondents who were mostly first time home buyers, salaried class and living on rent. The representative set had 58 per cent males and 42 per cent females.
“As of now the policies do not differentiate between the actual end user and the wealthy persons who are retail investors with four or five houses. It seems the policy makers only understand who are organized investors. However, the tax benefits should be clear and encourage one house per person. No one should be encouraged to have more than one house at the cost of needy home seekers,” says Abvhinav Shukla in Mumbai.
“If only the government is sincere about its ‘Housing for All’ then the Union Budget this time should clearly announce all incentives and tax exemptions only for first home buyers. People having more than 2-3 houses should be rather levied additional taxes and stamp duties as a deterrent for investment,” opines Swati Chandra in Mumbai.
The developers on their part maintain that it is the policy makers who have to look into this grey zone. Nikhil Hawelia, Managing Director of Hawelia Group maintains that if Union Budget announces incentives for the first time home buyers the developers will only be benefitted by this instead of business getting affected.
“We are already complying with the mandatory provisions, like asking for Pan Card of the buyers. Contrary to the perception that the housing sales will be slow if investors are discouraged, I feel if end users are encouraged then the housing market in general will be benefitted. It will help both the developers as well as the buyers if Union Budget announces so,” says Hawelia.
Nearly all the home buyers, 92 per cent, demand simplificati0n with the taxation of house purchase where any infinite delay in construction should not deprive them with the legitimate tax rebate.
More than half of the respondents, 54 per cent, feel additional tax incentive of Rs. 50,000 for houses up to Rs. 50 lakh announced in the last budget is not enough in most of the metro cities of India. They are hence demanding the cut-off to be houses worth Rs. One crore to be eligible for getting additional tax exemption.
The survey asked the homebuyers most relevant question of housing market today: will the demonetization benefit them? Nearly three-fourth of the Indians, 72 per cent, do not think so. However, More than two-third of the respondents, 68 per cent, feel the negative publicity with the demonetization and the reported loss to the Indian economy on the eve of elections in five states will force the government to dole out something for the home buyers in the upcoming Union Budget.
Finally, the homebuyers also want clarity over the tax implications Post the roll out of GST. More than half, 58 per cent, do not really understand what would be the tax burden after the GST. They demand the Finance Minister to clarify this in the upcoming budget.
