Five policies that changed the face of the Real Estate Industry in India
In recent years, the Central government came up with several policies that have upside downed the real estate sector of India. You may have heard about the ‘surgical strike’ on the black money through demonetization or about the revolutionary RERA, here are top five policies that have impacted the real estate industry the most.
1. Real Estate (Regulation and Development) Act, 2016
A popular and much talked about regulation, also considered as an act which revolutionised the real estate sector. The law came into force in 2017, and it brought in the protection of the homebuyers and transparency, accountability, efficiency in the construction business. The act also placed a regulatory mechanism to check the uncontrolled growth of the sector. It also has strict provisions so that the developers adhere to the norm defined under the act.
2. Goods and Services Tax (GST)
1st July 2017, a date will be remembered as much-awaited GST was rolled out by the Central Government. One Nation One Tax – the GST subsumed several other taxes including service tax, VAT, excise duty and several other taxes. The effective tax on under-construction properties was fixed to 12%. GST removed multiple taxes for homebuyers. Moreover, it also enhanced transparency in the transactions in real estate.
3. Amendment of the Benami Transactions Act
The Central government brought in the amendment to the Benami Transactions Act in November 2016. The amendment to the act made it more relevant and stringent to the present times. The amended act lays new rules and penalties to tackle Benami transactions. It made India heaven of Investment by making the real estate sector more transparent. Moreover, lands seized under Benami property will be used by the government to fast track its ‘Housing for All by 2022’ initiative.
4. 100 per cent reduction in profits for affordable housing construction
The central government announced that the projects approved in between June 2016 to March 2019 are eligible for 100% deduction on profits for housing projects building homes up to 300 sq. ft .in the four metro cities and 600 sq. Ft. in other cities. This incentive encouraged several leading developers to venture into the affordable housing segment.
The step by the government to withdraw Rs 500 and Rs 1000 on 8th November 2016 helped the system to curb black money to some extent. The real estate sector is one of those sectors which had the direct and hard impact of the demonetisation. It resulted in the reduction of transactions costs significantly. Moreover, it also ushered the confidence of the consumers in the real estate sector.
Let us know what do you think about these policies. Comment Below!