HOUSE owners may be in for a bonanza this Budget. The government may increase the tax exemption ceiling on rental income from existing 30% to 50%. The National Housing and Habitat Policy which has recommended increase the tax exemption limit after, after having been cleared by the Cabinet is likely to be tabled in the Parliament soon. As the proposal deals with taxation policy of the government, it is likely to be taken up in the Budget.
According to government estimates, around 16 million houses in the country which are remaining unoccupied would come into circulation. “Last year, the government announced levy of service tax on commercial properties. If the proposal to increase the floor for tax concession on rental income goes through it can become a revenue neutral exercise for the Centre,” a government official said. The official also said the move could encourage house owners to let out their properties which they lay vacant otherwise. It is estimated that crores will migrate to urban areas in the next decade as employment opportunities in the agriculture sector is decreasing by the day and rental housing is an appropriate way to accommodate a majority of the migrant population.
According to experts, the move would see a substantial increase in end-user consumption of available properties. Shortage of houses in the urban areas is a major cause for concern. The Eleventh Five Year Plan takes off with an estimated urban housing shortage of over 2 crore houses.
“The concept of developmental of rental housing bank by the corporate sector can become a reality only if the fiscal concessions are granted to them. Rental housing happens to be a big business activity in USA. Many corporations there own over hundreds of apartments for rental housing,” an official said.
“The move would certainly facilitate increased supply houses in urban areas. There is no other way to check prices and speculative practices than making actual physical supply available. Apart from facilitating construction of new houses, the government should also bring locked-up houses to circulation. As an incentivise the move would encourage more and more people to let out their properties. Additional supply will also help bring down the rentals also,” CB Richard Ellis MD Anshuman Magazine said Times of India. |
