Real estate sector seeks time extension for completion of affordable homes from 5-7 years

Real estate developers have urged the Centre for a two-year extension on the five-year deadline for completion of affordable houses.

“As an impetus to developers we seek an extension on the time-frame to around 7 years for completion of affordable houses, which is currently at five years from the date of sanction. We hope that this year’s Budget will include some positive incentives for the sector,” said Pavitra Shankar, Executive Director, Brigade Enterprises Ltd.

Shankar said “It will be helpful if the Government categorises affordable housing ticket sizes in line with the RBI and other institutions which is at ₹65 lakh.

The realty sector is also expecting the government to accord industry status. “This is a long-pending demand and this would infuse the much-needed liquidity by including the sector in the priority lending list of banks and other financial lending institutions,” said Murali Malayappan, Chairman and Managing Director, Shriram Properties Ltd.

Input tax credit

He added “Faster implementation of alternative investment funds (AIF) can also rescue the stressed residential projects. Completion of stressed projects will improve home-buyer sentiment and boost demand. Another demand of the sector is to reintroduce the Input Tax Credit (ITC) to allow developers to claim this benefit in conjunction with the lowered GST rates. This will help the home buyers as it will reduce the home acquisition cost for them. The real estate sector also looks forward to the implementation of uniform GST rates at one per cent for all segments.”

“A reduction in the GST on building materials from the current 18 percent to 5 percent will be a game-changer. The move will bring relief to developers, and the benefits can be passed on to the end-user, which will further improve the buyers’ sentiments,” said Ashish R Puravankara, Managing Director, Puravankara Ltd.

The streamlining of approvals enforced by RERA and the introduction of the Single Window Clearance will ensure approvals to be processed more quickly for projects.

Sankey Prasad, Chairman & Managing Director at Colliers International India, said “Given the prolonged impact of the pandemic on the Indian economy in general and the real estate in particular, we urge the government to offer a special package with a mid to long term horizon for the real estate sector to recover and embark on a sustainable growth path.”