Real Estate

Govt to come out with modern tenancy policy

Anil Urs Bengaluru | Updated on July 05, 2019

Measure to strengthen Housing for All initiative

As far as real estate is concerned, the Union Budget had a few hits and several misses. Infrastructure stayed at the top of the government’s agenda. This is of course significant, since infra development is one of the main propellers for economic growth and real estate benefits both directly and indirectly, said Anuj Puri, Chairman, Anarock Property Consultants.

Rental housing may soon shed its 'poor cousin' status, said Puri and added “The Finance Minister called out the old rental laws archaic and stated that the government will soon formalise a modern tenancy policy and share it with all states. Clear-cut incentives to boost rental housing via a sound policy will positively help the government to further strengthen its Housing for All initiative. We await further announcements on this critical policy intervention.”

“The new model tenancy, which is likely to be reintroduced, is expected to balance the rights and responsibilities of both landlords and tenants, that will make the rental market across the country more efficient and streamlined,” explained Megha Maan, Senior Associate Director, Research, at Colliers International India.

A shot in the arm for affordable housing

According to Puri, “The government announced major tax benefits that will help stimulate demand for affordable housing. Interest deduction up to Rs 3.5 lakh for affordable housing (priced <Rs 45 lakh), as against Rs 2 lakh earlier, will now be available until March 31, 2020. This could help attract first-time home-buyers. Further, nearly 1.95 crore houses are proposed to be provided to eligible beneficiaries under PMAY-Grameen, while another 1.95 million houses are to be constructed under PMAY-Urban between FY20 and FY22.”

The Budget underscored that the completion of houses that previously required 314 days/house in 2015-16 has come down to 114 days since 2017. If so, the target of Housing for All certainly looks more achievable. The government has set itself a tough target under the Housing for All initiative.

Published on July 05, 2019

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