Property developers and real estate companies are gung-ho about government proposalto make available land parcels from public entities for affordable housing through PPP.
“This is a positive step. Further, unavailability of land or high cost of land has been a hindrance to affordable housing projects,” J C Sharma, Vice Chairman and Managing Director, Sobha Limited told Business Line.
“The last few years have witnessed increasing focus on the affordable housing segment. It remains a key segment for the Government towards its mission of ‘housing for all’,” he added.
Sharma said aligning the definition of affordable housing in the Income-tax Act with the GST Acts, the Government has proposed to increase the limit of carpet area from 30 square metres to 60 square metres in Metropolitan regions and from 60 square metres to 90 square metres in non-metropolitan regions. It is also proposed to provide the limit on cost of the house at Rs. 45 lakh in line with the definition in the GST Acts. Increasing carpet area was an important demand of the sector, which has been addressed appropriately.
To provide further impetus to affordable housing segment, the Government has sanctioned over 81 lakh homes under Pradhan Mantri Awas Yojana (PMAY) Urban scheme with an investment of about Rs 4.83 lakh crore. Of these, construction of 47 lakh houses has already begun.
Besides this, an additional deduction of up to Rs. 1.5 lakh for interest paid on loans borrowed up to March 31, 2020 for purchase of a home valued at Rs. 45 lakh has been allowed. “This will give the much needed fillip to the affordable housing segment. More importantly, this translates into a benefit of Rs 7 lakh over the loan period of 15 years,” explained Sharma.
Bijay Agarwal, Managing Director, Salarpuria Sattva said “Interest deduction up to Rs 3.5 lakhfor affordable housing for loans taken till March 31, 2020 will see more sales in this category. Affordable housing will get an added impetus under PMAY. The proposed reforms to be brought under the Model Tenancy Law is likely to enhance rental housing and increase the investors’interest.”