As some bold and audacious steps have already been taken by the central government recently. Implementation of demonetisation, RERA and then, GST are the clear signs that government is strict to strengthen the Indian economy. Now their next aim is to revive the ongoing slump in the real estate. Plus, they are giving a special attention to the affordable housing market under its scheme Pradhan Mantri Awas Yojana (PMAY). Hence, there are some latest developments in the affordable housing market that everyone, whether home buyer or not, should be aware of. Let’s take a quick look.
GST Relief for Work Contracts
Recently, a notification was published in which Good and Service Tax (GST) for work contracts in an approved project under affordable housing of up to 645.83 square feet would be 12% which also includes the state GST as against 18%. However, there are chances that this change will have a little effect as to keep the operation as low as possible, most developer does not hire work contractors.
Lower Stamp Duty
The advisors in the central government have suggested to collaborate with the state governments in order to lower the stamp duty charges. They have also suggested that the state should think of releasing the land caught in litigation as the rules have become outdated now with respect to the urban land ceiling. Due to lowering the charges, there will be some loss in the revenue but this loss can be recovered once it becomes successful and triggers a positivity in the market which ultimately enables more people to buy.
Focus on Small Cities
When it comes to affordable housing, small cities are the one which is most promising and hold a very strong potential to grow. It is because of this fact that the State Bank of India has planned to ease their home-loan approval process and to deploy more resources in this sector. The Pradhan Mantri Awas Yojana (PMAY) has been a huge hit amidst home buyers seeking a low-cost accommodation, hence more professionals are to be trained to propagate and explain the benefits of the scheme in the small cities.
Easy Approval for Home Loans
The dream of bringing the affordable housing to everyone’s reach will remain in dreams until a single-window clearance system is not put in the right place. The same has been iterated by the RBI Governor, Urjit Patel. As of now, all the real estate projects have to wait for at least six to twelve months to receive all the approvals. But, as the affordable housing is one of the pet-projects of the central government, therefore, a single-window clearance has become the need of the hour, without which things will never come in reality. They will only remain on papers.
Sick Public Sector Unit to Get a New Life
There are chances that the public sector enterprises may have to lose their lands but it will play a big role in favouring the cause of affordable homes. Around seven land parcels have been recognised in Gurugram, Ranchi, Pune, Burdwan and Nainital and in-together they are ready to yield around 2500 acres of fresh land to provide wings for the affordable housing scheme.
New Tech Challenge
Everything in the 21st century is complemented with technology and hence, the real estate also needs to be amalgamated with technology to provide it a much-needed pace. It is because of this reason that the central government is focusing more towards Housing Construction Technology Challenge in 2018 to construct 1.2 lakh affordable houses by 2022 under Housing for All scheme. Niti Aayog CEO, Amitabh Kant was quoted as saying, “You cannot do affordable housing if you are constructing them in three years. The rate of interest is so high that it will never be affordable. Affordable houses need to be constructed three to four months and that is possible with the help of technology.”