Budget proposals to curb investor demand in homes

Cap for deduction on loss under income from property and reduced holding period for LTCG will impact

Two Budget proposals could curb the demand for residential properties, whose market has already slipped after demonetisation.

According to the Budget, a person owning a second home can claim a deduction of Rs 2 lakh a year on account of losses on it. Currently there is no limit on the deduction that can be claimed.

"Unless property prices start appreciating, this move will reduce the incentive a salaried person earlier had to invest in a second home and optimise tax. We believe this is likely to impact demand, especially in the top seven metros (more service-sector jobs), in an already