The Finance Minister’s budget proposals, such as a model tenancy code, making government land available for affordable housing, interest exemption on affordable housing could give a big push to affordable housing and help developers who are hit by credit crunch.
“Lack of land availability and rental housing policy have been big bottlenecks for affordable housing.Both (freeing up land and establishing model tenancy code) will help push affordable housing,” said Ramesh Nair, chief executive at JLL, a property consultant.
Nair said that government could come out with tax incentives for developers doing rental housing.
“The new model tenancy, which is likely to be re-introduced, is expected to balance the rights and responsibilities of landlords and tenants and will make the rental market more efficient and streamlined across the country,” said Megha Maan, senior associate director, research at Colliers International India.
Experts added that the interest exemption upto Rs 3.5 lakh for affordable housing would help boost residential sales.
“Interest deduction up to Rs 3.5 lakh for affordable housing, as against Rs 2 lakh earlier, is available till March 31, 2020. This is expected to drive the much-needed urgency in sales and bring the fence-sitters back into the market within this financial year,” said Aashish Agarwal, senior director, valuation & advisory at Colliers International India.