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Call to rationalise taxes to ensure ‘housing for all'

| Updated on: Mar 22, 2011
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Infrastructure development, bringing down land costs and rationalisation of taxes are essential to ensure housing for the common man, according to Mr Irfan Razack, Managing Director, Prestige Group.

‘Housing for all' a goal spelt out by the Central and State Governments will remain a cliché unless the policy makers address the issue of high land costs and taxes. Together the cumulative tax on housing comes to over a third of the price of a residential unit and it has to be borne by the end user. Infrastructure development, improved connectivity, satellite towns and low land costs will make housing more affordable.

Addressing the inaugural of the two-day conference, Estate South, organised by the Confederation of Indian Industry, Mr Razack, who is also the conference chairman, said real estate is among the largest contributors to the GDP but is also the most taxed sector with stamp duty, VAT, service tax and a host of indirect taxes that add 30-35 per cent to the cost of a project.

Mr Anshuman Magazine, Chairman and Managing Director – South Asia, CB Richard Ellis, said attracting long- term funding to real estate and expediting infrastructure development will enable multiple advantages of enhancing supply, bringing down costs and sustaining development through the next couple of decades.

With double digit growth forecast from 2012, consumption will grow and urbanisation is inevitable. Demand across all segments of real estate including office, retail, factory and housing would increase. Infrastructure development and connectivity will release more land for development and help bring down costs.

Mr Harjit Anand, former secretary of the Ministry of Housing and Urban Poverty Alleviation, and Co-President, Euro India Centre, urban slums housed more than half of the population of a city like Mumbai. Housing shortage was primarily in the economically weaker sections and low income groups. Unless the Government supports housing through land allocation and cross subsidisation, housing will not come within reach of large sections of society.

Mr Prakash Challa, Managing Director, SSPDL Group, said the real estate developers were not against regulation but the Bill to regulate the developers would only complicate procedures in an area that is stiffly regulated. Setting up an ombudsman would be preferable to address consumer protection.

Published on March 22, 2011

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