Rental housing has been given a big boost in the Union Budget 2021. It offers a tax deduction for those undertaking rental housing projects and this is likely to enhance supply.
“As anticipated, affordable housing and rental housing have got a big boost, with the government extending the period for extra deduction of ₹1.5 lakh available for loans up to March 31, 2022. This will keep demand buoyant for affordable housing in 2021 as well,” said Anuj Puri, Chairman, Anarock Property Consultants.
He further added, “The extension of the tax holiday for affordable housing projects for one more year will help bring in more new supply within this segment. As per Anarock Research, affordable housing already accounts for more than 35 per cent of the supply across the top seven cities in the country.”
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Dr Samantak Das, Chief Economist and Head of Research, JLL India, said, “While the government has not announced any significant fresh policies and / or programs pertaining to real estate, its commitment towards boosting affordable housing remains intact. The Budget has extended the benefit of additional interest deduction on home loans for first-time homebuyers in the affordable segment.”
“Further, there is a time extension to claim the tax holiday on profits from affordable housing projects until March 2022. The government continues to promote affordable rental housing schemes by providing tax exemption for notified rental housing projects. This will accelerate the pace of investments in this scheme and is likely to fall in line with achieving the overall objective of ‘Housing for All’,” he added.
Arpit Mehrotra, Managing Director, Office Services -South, at Colliers International India, said, “With focus on affordable housing, ₹1.5 lakh principal deduction for affordable housing has been extended. This is a welcome move to give a necessary push to the ‘Housing for All’ initiative.”