Union Budget 2017 – Impact on Real Estate in India


The Union Budget 2017 has proposed several positive measures to strengthen the
edifice of the Indian real estate sector For instance; the facilitation of
capital gains taxation norms has triggered a wave of happiness in realtors and
property buyers alike. Given below are few key measures that will provide the
much-needed thrust.

– The tax period for capital gains has been reduced to two years from three
years. This means that lesser capital gain tax will be in the offing for those
intending to sell their property after a span of two years of purchase, as
against three years (earlier).

– The nominal tax on ready but unsold inventory is to be charged after one year.
This means that the person holding the land in a given real estate project will
have to pay ‘tax on gains’ once the entire project is completed and not before
that. Earlier, the price of the land was evaluated by the owner at the time of
entering into a contractual agreement with a builder; and the taxable amount on
the notional gains had to be paid on the assessed price at that point only. As
the tax payment will be deferred, more land owners will be encouraged to tie up with
developers and realtors. This will propel the supply of properties in the
positive direction, further benefiting buyers.

It Starts with the Buyer
An understanding of urban real estate buyers reveals a streak of skepticism
with regards to under-construction projects and developers. For prospective
buyers to turn into new property owners, all client objectives have to be
optimized to the hilt. In a way, this explains why branded/corporate developers
tie with established players for making it big in the Indian real estate market
space. Bombay Realty parented by Wadia Group, is no different. This niche real estate brand, with
numerous construction milestones to its credit, has been nurtured along with
Bombay Dyeing, Britannia and Go Air by Wadia Group. Ever since its inception,
the real estate brand has etched one success story after another.