Dream Budget. What home buyers want from Jaitley

Delayed hand-over, escalating prices, soaring monthly payments − you know how life has been for home buyers in recent times. These issues made home buying more a nightmare than a dream. So, while we eagerly await Budget announcements that will light the way to acche din in your own home, what could a dream Budget for home buyers look like?

Greater protection

The dream: You want to look for a home and a professionally certified broker guides you through the process. You get clear disclosures on the price, size and features, along with quality guarantees. Not just that, the project is marketed only after all approvals are received and plans are cleared. And if by chance, delivery is delayed, there is no need to fret as you will be financially compensated for the loss. All these are written in a clear buyer-friendly contract and if the builder violates it, justice is close at hand and swift.

The reality: These are the things that buyers in Mumbai’s Campa Cola flats or DLF Belaire in NCR probably wish they had. The truth is that while a home purchase is the biggest investment you will probably make in your lifetime, there is little in the way of protection for your multi-lakh investment at this point in time.

The solution: Implementing Real Estate Regulation and Development Act will bring in more accountability. “Clauses in the bill, such as restrictions on the launch of projects without all required approvals, will protect the buyer and reduce hassles and risks,” says Manpreet Grewal, Regional Director, RE/MAX India, a real estate brokerage firm.

Lower cost

The dream: You begin your house hunt and find that prices are reasonable, with all additional taxes and costs already spelt out.

The reality: Buying a home is a very costly affair. But once you have finished budgeting for your home purchase, various factors could contribute toward further price escalation, resulting in additional financial stress for you and your family. For one, land prices are high and construction costs have been on the rise due to inflation.

Multi-year delays in construction add to the costs for builders, who then pass it on to the buyers. And indirect taxes such as VAT, service tax and stamp duty add 30-40 per cent more to the price.

The solution: “The government can simplify the approval processes and quicken delivery timelines,” says JC Sharma, VC and MD, Sobha Developers, a Bangalore-based builder. This will help relieve the customers’ financial burden.

One suggestion offered is to introduce single-window clearance to reduce delays and increase transparency. Buyers are also hoping that reducing indirect taxes for homes below a certain price will be considered by the government. Developing infrastructure facilities in the peripheral locations of metros, where land is cheap and home prices are more affordable, is also one of the measures to watch out for in the Budget.

More affordability

The dream: Your monthly EMI is due and after paying it, you still have free funds and wonder if you should start a Systematic Investment Plan for your retirement.

And when it is tax filing time, you are happy to be a home owner, as you get more tax deductions on the interest and principal paid .

The reality: The high cost of homes, coupled with high interest rates, has probably given you many sleepless nights. This is where the Government can do quite a bit.

“The tax benefit on home loans has been stagnant for quite some time,” says Sukanya Kumar, Founder and Director of RetailLending.com, a home loan advisory firm.

The solution: By increasing the deduction to over ₹3 lakh to keep up with the higher interest rate and home prices, home buyers can get a lot of relief.

“The Government can consider issuing tax-free housing bonds paying 5 per cent interest and use the funds to offer home loans at 7 per cent,” suggests Lalith Kumar Jain, Chairman of CREDAI. “ If these bonds qualify for investment towards capital gains exemptions, both investors and borrowers can benefit,” he adds.