The Hindu Business Line : No new taxes is good news, say realty cos

Bangalore, July 7 The real estate sector leaders believe that no additional burden of taxes and duties in the Union Budget is good news for them as input costs will remain the same.

“No negative news for the sector which is seeing signs of revival now is by itself good news. We are happy with the structural directions that this Budget has provided,” says Mr J.C. Sharma, Managing Director, Sobha Developers. As a developer, “we are happy that costs have not escalated, which is a good thing,” he adds.

What is welcome and something to look forward to is higher disposable income in the hands of the consumer, who would have extra money now thanks to the increase in income-tax exemption. “Extra money in the consumer’s hands means a lot for us,” says Mr Koshy Varghese, Managing Director, Value Designbuild, a Bangalore-based real estate developer.

That India Infrastructure Finance Company (IIFCL) will be given more flexibility and has been authorised to raise Rs 1 lakh crore for the development of the infrastructure sector is an indirect boon to the real estate industry, says Mr Anuj Puri, Chairman and Country Head, Jones Lang LaSalle Meghraj, a real estate services firm, in a press release. He pointed out that an increasing number of infrastructure projects have a real estate component by virtue of a cross-subsidisation principle.

“Therefore, boosting infrastructure projects gives an impetus to real estate, as well,” he added. According to Mr Puri, the intended clearing of regulatory bottlenecks for infrastructure projects will help bring forward many pending projects, thereby boosting the construction sector. The increased allocation for the National Highways Authority of India will mean improved and accelerated connectivity, raising the value of existing real estate along these routes, thus opening up new areas for development, he says.

Mr Varghese draws attention to the fact that the Government would come out with the new direct tax code in 45 days, which could also impact the real estate sector.

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