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Budget Expectation 2015/16 In Real Estate Gurgaon

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Budget Expectation 2015/16 In Real Estate Gurgaon

Last updated: March 1 2015
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  • Budget Expectation 2015/16 In Real Estate Gurgaon

    Hi
    Greetings

    Lot of punters, speculators, BJP bandwagon of traders are betting VERY VERY HIGH on this budget.

    Seems most are invested in Stock market and Real Estate including friends who are Marwaris, Jainis, Banias, Mahajans from Gujarat, Rajasthan, Maharashtra business persons (traders basically). They all have HUGE HOPES that markets will simply jump double the current price.

    What is the secret ingredient, recipe, tax structure, industry bonanza for real estate that people anticipate??


    Trust me, of the few Really HNI guys I have spoken to.. NONE is PESSIMIST and most are having their money bags open for investment ahead of actual growth reflecting in balance sheets of companies and resale rates of property across various markets..

    How do friends pan it and what are their feelings, gut instinct about this budget??

    Cheers
  • #2

    #2

    Re : Budget Expectation 2015/16 In Real Estate Gurgaon

    Expectations ;

    7 % interest on home loan for First Home Buyrs and Higher Rate of Intereste for Second Home Buyer and No Loan/Tax Relief for those who buy House in india for investment purspose.

    Comment

    • #3

      #3

      Re : Budget Expectation 2015/16 In Real Estate Gurgaon

      Nicely put Abhishek

      Comment

      • #4

        #4

        Re : Budget Expectation 2015/16 In Real Estate Gurgaon

        Expectations from budget 2015-16, for Real Estate

        1. Registration of houses at time of buying with Pakka documentation mentioning covered area and delay penalty
        2. Lower stamp duty for first time buyer to 4-5 percent
        3. Higher /add on stamp duty for second home buyer to 7-8 percent
        4. Sellers to pay stamp duty for any property sold within 3 years of purchase

        Comment

        • #5

          #5

          Re : Budget Expectation 2015/16 In Real Estate Gurgaon

          LONG LIVE PUNTERS, SPECULATORS, CAPITALISTS and STOCK MARKET ANIMALS!!!

          is written all over the budget..

          TAX PAYING, LAW ABIDING, MIDDLE CLASS, the biggest consumer and saver has been IRONICALLY IGNORED and not a single policy relief given to it. (except some medical and travel, which is peanuts) Nutshell Middle class, salary earner wanting to have his own home and relief from high inflation, is left to his fate and gets
          BABA JI KA THULLU!!!!


          HOME BUYERS are left entirely at the mercy of RBI for interest rate cuts. No changes in tax brackets, no changes in rates, no changes in interest rebates on home loans etc.

          GOING FORWARD:
          -Clearly, the budget says, save your tax or hide your income, do whatever you want to, we dont care.
          -Dont find Real estate to be in flavour for the next few years, hence buy only if need a home to live in/first buy.
          -Re position investments to stocks of Infra/Power/Roads/Irrigation/Railway/Sugar and Politically backed listed companies (Adani/Reliance/Ruia/GUJU companies), possibly a few select PSUs with good balance sheets in Power/infra.
          -No incentives, measures for attracting capital for real estate of any format. No chance for retail commercial growth due to unclear policy. No change in stance on bringing a regulator for Residential real estate, which is the biggest industry beyond banking in the economy.
          -Infra investment boost is significant but will show results only if plans are effected and results visible after 2-4 years, if at all. Primarily to benefit cement/steel/contracting/suppliers companies.

          Views please..

          Cheers
          Last edited March 1 2015, 11:39 AM.

          Comment

          • #6

            #6

            Re : Budget Expectation 2015/16 In Real Estate Gurgaon

            Budget 2015: Highlights for the real estate sector - The Economic Times

            Even though the Budget 2015 is being hailed by many, as opposed to the
            expectations of the real estate sector, not much was announced for the sector by the
            Finance Minister Arun Jaitley. While no direct measures were announced to boost the
            housing sector, the FM did not forget to highlight the 'Housing for all by 2022' mission.
            Industry experts have shared mixed feelings about the Budget. For instance, Anshuman
            Magazine, CMD, CBRE made his disappointment visible by saying, "No incentive was
            announced to boost the real estate sector."


            However, others such as Surabhi, Colliers International preferred to highlight the
            positives. "The budget seems to be aligned with the agenda of Housing for all by 2022.
            The intention to construct 6 crore housing units for rural and urban India housing by 2022
            were a positive move. This will help to fill the huge demand supply gap in housing sector
            and will make housing the next booming sector in India."

            Here is a quick look at the measures announced that might impact the housing sector
            directly or indirectly.
            * Allocation of Rs 22,407 crore for housing development in the country. This would
            involve construction of 2 crore urban and 4 crore rural housing units across the country to
            realize the aim of 'housing for all by 2022'
            * Construction of 6 crore toilets under the 'Swachch Bharat Abhiyan' * Allocation of Rs 4173 crore for water resources in the country
            * Introduction of the 'Benami Transaction Bill' in order to curb black money in the property
            market. Prohibition of acceptance of an amount of more than Rs 20,000 in cash for any for any property deals
            * Allocation of Rs 70,000 crore for development of infrastructureroads,
            rail and agriculture.
            * Tax free bonds for infrastructure for roads, rail etc will bring low cost additional debt funds along with Budget funds.
            * Proposal to overhaul the capital gains taxes to pave way for the listing of Real Estate Investment Trusts (REITs) in the country.
            "The REIT pass through benefits will do good for more investments from REIT for rental,
            commercial and other properties," said V Suresh, former CMD of Hudco Housing
            and Urban Infrastructure specialist
            * Allocation of Rs 1200 crore for the development of the Ahmedabad Mumbai
            industrial corridor.
            * Implementation of GST by April 2016.


            The biggest disappointment probably was the exclusion of the plan for '100 smart cities' in the country. "The budget has not talked about 100 smart cities.
            Further, hike in service tax would erode the purchasing power of the average consumer," stated PR Swarup, director general, CIDC. Thus, it seems the real estate sector would benefit only if the said measures are implemented to its fullest potential.

            ----------------------------

            100% ullu banaoing budget for middle class wanting a home to live in. Now mobile bill, internet bill, delayed payment penalties on credit cards, services bills, maintenance bills etc will all be costlier

            a 2 % increase in service tax means a 20% appx absolute increase in service tax on previous base.
            No relief extention on interest on home loans
            No policy measures for a regulator in the industry
            Overall measures taken for investors to move money from real estate to stock market
            hence a punters/speculators budget which has nothing to do directly with a common middle class salaried tax paying person.

            Cheers

            Comment

            • #7

              #7

              Re : Budget Expectation 2015/16 In Real Estate Gurgaon

              Hike of 2% in service tax to push up costs, say realty companies

              BUDGET SAYS DONT BUY A HOME FOR YOURSELF, MAKES IT COSTLIER TO BUY OWN HOME

              Budget 2015: Home buyers will have to pay more | Business Line

              Hike of 2% in service tax to push up costs, say realty companies


              BENGALURU, FEB 28:
              The increase of nearly 2 per cent in service tax is going to increase the overall costs of home buyers and those availing services from the real estate sector, creating further stress across the sector, said Sanjay Dutt- Executive Managing Director, South Asia, Cushman and Wakefield.

              Except for REITs and curbing of benami transactions, there was no specific mention alluding to the sector this time around unlike the last Budget presentation.


              (Knowing very well that 75-80% invested in Real estate/land banks is black/unearned/unethical/antisocial money of politicians, babus, gundas, mafia etc strict laws is clearly reflective of govts intent to move this HUGE corpus to Share market. Most Real estate players are front end books for such money. Clear underlying message about which investment segment to be promoted and which to be dissuaded)

              The real estate sector is largely disappointed with this year’s Budget, that the Finance Minister has missed an opportunity to use real estate sector as another trigger for economic growth.

              Shrinivas Rao, CEO-Asia Pacific, Vestian, said Budget 2015-16 has taken many positive initiatives to boost the Indian economy by empowering the individual State economies and creating ample scope for employment generation. Proposing to overhaul capital gains taxes to make way for the listing of Real Estate Investment Trusts(REITs) is a vital step forward for the setting up REITs in the country. Meanwhile, the increase in infrastructure investments by INR 700 billion in 2015-16 will open up vast opportunities for Real Estate Sector and positively impact its growth. A prudent and progressive budget!

              Mike Holland, Chief Executive Officer, Embassy Office Parks, commenting on the Budget said “High focus and funds, benefits and entities in the infrastructure space particularly in areas of roads and power is welcome for the urban real estate industry.”

              “Indicators that tax pass through on REIT’s will be implemented is welcomed – reference to a rationalization of the CGT in the restructuring is welcome as well as the indicator that the STT will apply, as opposed to the DDT. We will await and review the detail but if the understanding is correct, this has the potential to stimulate the REIT market in India which can release lower cost capital, increase liquidity in the real estate market and stimulate the next phase of the enhancement of India’s urban infrastructure,” he added.

              M R Jaishankar, CMD, Brigade Group, said “It is a good growth oriented budget, with special emphasis on infrastructure, Swacch Bharat, introduction of pension schemes, curbing black money & improving ease of doing business. But as far as Housing industry is concerned, there is no special encouragement inspite of ‘Housing for All’ vision. To that extent for our industry, the budget is disappointing.”

              Suresh Hari, Secretary, CREDAI Bengaluru said “the Budget is exciting and needs to be studied in depth. But overall there is a clear approach on infrastructure and growth. As far as the realty sector is concerned the following announcement encourages and helps the sector. Skill Mission enhancement,- which will bring in enhanced skilled work force.”

              Long pending demands

              Sanjay Dutt said Some of the long pending demands of the real estate sector pertaining to removal of DDT and MAT in SEZs, reintroduction of Section 80 -IB for low cost housing, extension of interest subvention for affordable housing etc. have been ignored yet again.

              (Not promoting SEZs again may be vindictiveness towards congress policies/beneficiaries but clearly against its own MAKE IN INDIA and manufacturing thrust, in all a foolhardy approach, devoid of genuiness, objectivity and sensitivities)

              However, on the positive side, the withdrawal of Wealth Tax could boost investments by the middle-class and some sections of the high-net worth individuals, as they now no longer need to worry about getting taxed each year on long term investments in the sector.

              Second, allowing rationalisation of capital gains on transfer of assets to REITs has actually taken care of a key demand by the sector. Further, the announcement of lowering Corporate Tax from by 5% in the next few years will also help to attract further investments from domestic and foreign companies.

              (This article was published on February 28, 2015)
              ------------------

              Reducing corporate tax is welcome, but benefits punters/speculators on stock market more than anyone else. eg
              -an eps post tax of 10 at PE of 20 for a Rs 200 share would increase the price of stock at constant market and earnings to EPS of 10.52 at PE of 20 results in share price of Rs 210 per share.
              -ALL TAX FREE GAINS.
              -NO WORK DONE, NO INVESTMENT ADDITION, NO RISK GAIN
              -Actually, punters/speculators/management would show higher profits by 20-50% (or 12-16 EPS)
              and
              -Reap huge Tax FREE returns on their Capital invested in business/shares in terms of increase in share prices to say 15X20 or Rs 300 per share.
              -Riding on lowering interest costs, capitalists would leverage on cheap debt while withdrawing personal equity and reducing net costs but enjoying even higher EPS on equity
              -Reduction in Bank Financing from an average basket at 15% to 12% likely over next few years at constant market/demand/sales/expenses would reduced interest outflow by 3/15% or 20%lower interest outflows, practically doubling EPS of many over leveraged companies, all taxed at a lower rate!!

              Finance minister has clearly given a fillip to the stock market and to companies backed by/invested in infra/road/rail/pani ki tanki/irrigation (pipes)/ cement/saria/Solar panels/electrical grid/distribution/Projects/ power/commercial vehicles dumpers and loaders/construction equipment/ contractors etc for major tax free earnings and capital gains.. Jai JHUNJHUMWALA and the likes!!!

              Noting for a Common man/Middle Class who knows nothing about stocks, shares, investment, waiting for a home delayed by ages, wanting to buy a home, wanting relief on EMI and rentals. For the poor and marginal housing for all will depend on format/implementation/distance from place of work/cost/execution agency/allocaton criteria etc etc etc.. Hence again no clarity
              Last edited March 1 2015, 12:25 PM.

              Comment

              • #8

                #8

                Re : Budget Expectation 2015/16 In Real Estate Gurgaon

                Union Budget 2015-16 is big disappointment to real estate sector

                Union Budget 2015-16 is big disappointment to real estate sector - Business Today

                Union Budget 2015-16 is big disappointment to real estate sector

                Rajesh Prajapati
                The Union Budget for 2015/16 is a big disappointment to the real estate sector.

                There were huge expectations from the government but it did not deliver on what was promised.

                Prime Minister Narendra Modi had announced 'Housing for all by 2022', however he did not give a roadmap on how to achieve the same, although it is the first time that the target has been set in the Union Budget.

                The increase in the service tax to 14 per cent will prove to be quite burdensome as it will affect the purchasing power of home buyers.

                Overall, the expectation of the housing industry from the government was very high and they have not been met.
                (The author is the managing director of Prajapati Constructions)

                Union Budget 2015-16 is big disappointment to real estate sector - Business Today

                - Atleast abatement for service tax on residential housing should have been increased for nil impact or reduction of Service tax incidence..
                IMPACT
                Service tax for under 1cr/2ksq ft Carpet area increased from 3.09% to 3.605% or by 20 %
                Service tax for over 1cr/2K sq ft carpet area increased from 3.708% to 4.326% or by 20%
                Hence one paying a total service tax of about 3 Lacs (say for a 3bhk at 5K) would pay extra 60K appx.
                This is despite effective increase from 2.57% to 4.32% as a result of reduction in abatement and increase in service tax progressively since March 2012.

                Effective date| Rate| Service Tax | Abatement

                1st Jul 2010- 31st Mar 2012| 2.5750%| 10.30%| 75%|
                1st Apr 12- 28th Feb 13 | 3.0900%| 12.36%| 75%| (Below 2K carpet area or value below 1Cr)
                1/3/2013| 3.7080%| 12.36%| 70%| (above 2K carpet area OR value above 1 Cr)
                From 1st April 15| 3.6050%| 14.42%| 75%| (Below 2K carpet area or value below 1Cr)
                From 1st April 15| 4.3260%| 14.42%| 70%| (above 2K carpet area OR value above 1 Cr)
                Last edited March 1 2015, 01:49 PM.

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