With a tweak in definition, finance minister Arun Jaitley has made affordable housing more affordable. Henceforth, instead of built-up area, carpet area will be considered for low-cost housing. This will broadly increase house sizes by 30%.
While a 30sqm (300sqft) cap will apply to municipal limits of the four metropolitan cities, for rest of the country, including in peripheral areas of the metros, a limit of 60sqm (600sqft) will count. This should cheer people in Noida, Gurgaon and Ghaziabad in NCR-Delhi; Navi Mumbai, Basai, Thane and Kalyan around Mumbai; and Chandan Nagar and Howrah near Kolkata.
Two-bedroom flats of 800sqft in most parts of the country will now come under affordable housing category as builders generally set aside 25% of built-up area to arrive at carpet area.
Credai president Getamber Anand said this would come as a shot in the arm for a struggling real estate sector. With FM giving an infrastructure status to low-cost housing, firms will now be able to raise cheaper funds. This, in turn, will result in highly competitive rates for buyers. Jaitley also announced that realtors would be exempt from paying tax on profits in this segment for five years starting 2016, instead of three years .
The Centre plans to build 1 crore houses for the poor by 2019. With this in mind, the allocation to Pradhan Mantri Awas Yojana has been raised to Rs 23,000 crore from Rs 15,000 crore.
Jaitley’s clarification on notional rent is another plus. At present, a developer has to pay income tax on the deemed rental income on unsold units of completed projects. Now, no such tax needs to be paid till a year of getting the completion certificate for a project.
Walls N Roof Comment: Affordable housing a great initiative by government has made a decision to increase the houses sizes upto 30sqm (300sqft) which would apply in four metropolian cities while in other cities it will go upto 60sqm (600sqft). Cities like Noida, Gurgaon and Ghaziabad in NCR-Delhi; Navi Mumbai, Basai, Thane and Kalyan around Mumbai; and Chandan Nagar and Howrah near Kolkata are those cities where the increase in size of houses will be a reason of joy for the home buyers. This decision of government would attract more people for investing in real estate sector.