REAL ESTATE: SOME LIKE IT ‘OUGHT, SOME LIKE IT SOLD. SOME LIKE IT IN THE FINANCING POT, NINE EMIS OL

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Developers have welcomed the increasedtime limit for the completion of projects from four years to five years forclaiming a deduction of their profits. However, they are not really for theincrease in excise duty because, according to them, this move will increaseinput prices and the burden will eventually be on developers as well as buyers.The 10 per cent service tax in real estate, as per many, will prove moreunfavorable to the buyers. Besides, the changes in the real estate sectorincluded allocation of huge funds in the rural area and property rights to slumdevelopers and increase in the set time limit for accomplishing a project fromfour to five years. GAURAVMITTAL, DIRECTOR, CHD DEVELOPERS    Theup side of the budget includes, surcharge on corporate tax decreased from 10per cent to 7.5 per cent, which will prove beneficial for all corporates. Besides,extension of subsidy for home loans less than Rs 10 lakh for one more year moreis again welcoming. However, the unfavorable point in budget 2010-11 is theservice tax, which will be applicable on all under construction properties. Atone side the government talks about promoting affordable housing and at thesame time making this tax applicable would only make these houses moreexpensive, which is ironic. Increase in excise duty from eight per cent to 10per cent, means increase in the price of raw material, will eventually lead tocostlier construction and costlier houses. I feel some initiatives should betaken to make affordable housing, economical to construct in true sense and notjust as an eye wash. This may not prove to be fruitful. SANJEEVSRIVASTVA, MANAGING DIRECTOR, ASSOTECH     Allocationof Rs 1,270 crores for the FY11 under the Rajiv Awas Yojna along with specialemphasis on low cost housing and slum rehabilitation will help buyers of lowcost housing in the rural and semi-urban area. Five years extension in thetime-limit for completion of projects eligible for deduction under section80-IB and extension of one per cent interest subvention for low cost housing to31.03.2011 along with increase in the IT slab rates for individuals would boostdemand for budget homes. Proposed service-tax at 10.3 per cent on the value ofadditional services provided by the builder and lease of vacant land (ifconstruction is undertaken thereon) would make the cost of home dearer to thebuyer. Imposition of service tax on rentals with retrospective effect from 1stJune 2007 would cost one percent to 1.25 per cent of the retailer's turnover,which is neither in the interest of the owner of the commercial space nor theretailer using that space. Talkingfrom the developers' perspective, developers undertaking low cost high volumemass housing projects will be benefitted. Investment-linked tax holiday for allnew hotels in the two-star plus categories would help developers undertakinghospitality projects. Butapplicability of service tax as detailed above and increased indirect taxes onraw materials such as steel and cement will increase the end cost and projectcosts would go up by four to five per cent, which would adversely affect thedevelopers. This may not be a good sign for the times to come for thisindustry. Anyway, we have to make the best of the good points from this. RK ARORA, CHAIRMAN & MANAGING DIRECTOR, SUPERTECH     Thebudget, this year talks of both positive and negative aspects for the realestate developers as well as the buyers. There is a revision in personal incometax slabs, which will strengthen the purchasing power of the buyers affectingthe demand of the residential sector. The common man will also be benefited bythe continued subsidy of one per cent for affordable housing loans, which willhelp this sector to grow. On the other hand, a two per cent increase in exciseduty of cement and steel might not prove profitable for the real estatedevelopers as the cost of construction would be expensive which will ultimatelyresult in the increased cost of the project and hence the buyers will beaffected. Also, it would have been a great support to the real estate sector ifSection 80I (B) would have been renewed to thrive the demand of affordablehousing. ABHISHECKLODHA, MANAGING DIRECTOR, LODHADEVELOPERS    Thefinance minister has taken a pro-active measure by reducing the income taxburden on the middle class and hence, increasing disposable income andconsequently leading to increased demand for consumables and housing. The focuson development of infrastructure is crucial as the world is looking at India asan important member of the global community. While there are no majorinitiatives for real estate, the lack of extension of 80 IB benefits to newprojects started after March 2008 is a missed opportunity, since it would haveled to creation of large volumes of affordable housing for the "Aam Aadmi'and also spurred economic growth due to strong cross industry linkages of theconstruction chain. We hope that the intent of the government to continue theeconomic momentum through a combination of consumption growth and fiscaldiscipline will be further enhanced through the coming year by concreteinitiatives on increasing productivity in our country - this would ensure thatthe goal of double digit growth rates is achieved soon. ANIL KUMAR SHARMA, CHAIRMAN &MANAGING DIRECTOR, AMRAPALIGROUP    Whileextending measured benefits to the realtors, the proposed budget visions itscommitment to promote "Aam Aadmi" housing by proposing majorallocations for it. Developers and real estate companies, however, were lookingfor much more than what the finance minister had to offer. The real-estatesector is all about demand and supply. In India, demand far outstrips supply.Budget 2010 is positive, balanced and growth oriented. By raising the exemptionlimits in the income tax, the government has sought to financially empower theconsumers, which would boost real estate sales. Although government has increasedthe cost of raw material, yet the budget this time can be viewed in a positiveway. The industry will witness an upsurge shortly marking a benchmark ofrecovery from the ongoing worldwide recession as the government has sought tofinancially empower the consumers, which would boost real estate sales. AMARAMBANI, VICE PRESIDENT RESEARCH, INDIA INFOLINE LTD    Onemajor devil in the budget detail is for the real estate sector. Service tax hasbeen levied on additional services provided by a builder to buyers likepreferential location, internal and external development of complexes (exceptvehicle parking). Furthermore, unless the entire consideration for a propertyis paid after completion of construction, the construction activity will becharged service tax. Renting of property, rent of vacant land under agreementto undertake construction of building or other structures will be chargedservice tax -- a drag on the bottom-line. MANISHPERIWAL, CHAIRMAN & MANAGING DIRECTOR, PIONEER URBAN LAND AND INFRASTRUCTURE    TheGovernment has treaded a line of fine balance to lead the economy to high GDPgrowth rate by investing in infrastructure sector, yet keeping the fiscaldeficit within manageable limits which has already undergone a substantialdeviation at 6.8 per cent from 6.1 per cent at the time of interim budget. Inthe backdrop of ambitious 'housing for all' and `Slum free India' agenda, therural and urban housing sectors have been given importance, largely throughGovernment's flagship programmes rather than the incentives real estatecompanies were hoping for. We feel investment in infrastructure will have acascading impact on the residential and commercial projects as the developmentfoot print can expand. The concessions in Direct Taxes on the salaried classshould have a positive impact on the mid to premium residential housing segmentin which we operate. But launched projects will suffer as the top line islocked and thin margins will erode further. The buyer will be impacted. Courtesy:-FT dt:- 07-Mar-2010 Forinformation about real estate, real estate india, Indian real estate property,property in india, Indian property, apartments, apartments for sale, apartmentsfor buy, apartments for sale in delhi, apartments for sale in gurgaon, apartmentsfor sale in indirapuram, flats for sale in delhi, homes, homes for sale, housesfor sale, homes for sale in delhi, homes for sale in gurgaon, houses for salein delhi, houses for sale in gurgaon, property investment options in delhi,investment option in real estate, real estate consultant, real estate agents,real estate developers and many more   logon   to http://www.zameen-zaidad.com and http://propertycafeteria.com/

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