The housing sector had high hopes from this year’s budget, with many expecting big-ticket reforms that would enable the sector to contribute to the government’s dream of providing ‘Housing for All’. But these hopes fell flat as the finance minister wound up his hour and a half long speech without addressing long-standing demands from the sector. But homebuyers do have some cause to cheer with the government taking steps to help first-time buyers and promote affordable housing. We round up the top budget announcements that should matter to you.

Affordable Housing gets a boost
100% tax deduction for companies building houses of up to 30 sq. meters in the 4 metro cities & 60 sq. meters in other cities, subject to them being to be built within 3 years of approvals.

An additional deduction of Rs 50,000 per annum for loans up to Rs 35 lakhs for first-time home buyers, where the house cost does not exceed Rs 50 lakhs.

Exemption from service tax on construction of houses up to 60 sq. meters under any Central or State Government scheme including PPP schemes.

Encouraging First-Time Home Buyers
First-time home buyers get deduction of additional interest of Rs 50,000 per annum for loans up to Rs 35 lakh sanctioned in 2016-17, provided that the cost of the house does not exceed Rs 50 lakhs.

Good News for Those Living On Rent
For professionals who live in rented houses and do not get the benefit of an HRA (house rent allowance) deduction, the current deduction of Rs.24,000 has been raised to Rs.60,000.

REITs get further clarity
Distribution made out of income of SPV (Special Purpose Vehicle) to the REITs and INVITs having specified shareholding will not be subjected to Dividend Distribution Tax (DDT), in respect of dividend distributed after the specified date.

The Property Team