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Budget FY23: Realty seeks increase in approval time frame for rental housing

In a bid to promote affordable rental housing as well as incentivise developers, the National Real Estate Development Council requested the Centre to increase the approval time frame of such housing projects by at least five years.

“…the country has just begun to formalise a rental housing framework in the country. The rental housing policy is not yet final across several states. Hence, to incentivise the developers of rental housing projects, the time limit of approval should be increased by at least five years,” said Dr Niranjan Hiranandani, Vice Chairman of NAREDCO, nn autonomous self-reaulatory body under the Union Ministry of Housing and Urban Affairs.

NAREDCO President Rajan Bandelkar said the Centre should increase the deduction of interest on home loan for self-occupied house from taxable income to at least Rs 5 lakh in order to promote the ownership concept.

Currently, interest on borrowed capital to acquire a house for rental purposes is allowed in full. However, in the case of self-occupied houses, interest is restricted to Rs 2 lakhs, the council said in a statement.

“The sales momentum had picked up during the second half of previous year. In this perspective, while there is a need to continue the sales pace, there is also a need to strengthen the hands of consumers,” Bandelkar added.

Noting that the Centre had taken up a pro-growth stand, he said, however, there is a need to continue the support offered to the realty sector amidst the renewed lockdown and economic uncertainty, he said, adding that there was a need to create a sense of home ownership and create value in buying homes.

Further, the Council urged the Centre to treat the units of ‘Real Estate Investment Trusts’ equivalent to listed entities for direct tax computation.

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