CREDAI seeks tax sops on affordable homes, lower interest rate

Realtors body CREDAI today sought tax incentives on development of affordable housing projects and interest rate reduction on home loans to below 7 per cent in their budget wish-list to boost growth in the sector.
Single-window clearance for the real estate project and industry status to the sector were some other demands made by Confederation of Real Estate Developers Association of India.
"Allow Tax (direct and indirect) concessions for affordable housing projects," CREDAI Chairman Lalit Kumar Jain said in a statement.
"Presently, interest rates charged by the banks to developers and home buyers are at an all-time peak and need to be brought down. The interest rate at least for home buyers must be brought down below 7 per cent," he added.

Jain said the affordable housing should be treated as priority sector and favoured a separate policy to boost this segment.
CREDAI Chairman mentioned that industry is going through tough times. "Sales have come down, home loans numbers are dropping and cash crunch is delaying the deliveries".

Jain also advocated an industry status for the realty sector, which would pave the way for easier funding to the developers at lower interest rate.
"Another long pending issue in the sector is Single Window Clearance. Currently, the approval process is very lengthy and takes around 1.5 years to 2 years for approval," Jain said.

The cost of delay in approval adds further to customers spending by 25-40 per cent, he added.
"The budget document should support a proper REIT (Real Estate Investment Trust) structure. If the long overdue in having a REIT structure is made, it can generate almost 1 lakh crore worth equity replacing debt," Jain observed.