CREDAI Proposes Increasing Affordable Housing Cap to ₹80 Lakh to Benefit Homebuyers
CREDAI, the Confederation of Real Estate Developers' Associations of India, has suggested to the government to increase the cap on affordable housing from ₹45 lakh to ₹80 lakh. The real estate body also recommends charging 1% GST on under-construction hom
Affordable HousingGstReal EstateCredaiHomebuyer BenefitsReal EstateNov 25, 2024
Boman Irani, the president of CREDAI, explained that the current cap was set back in 2017, and since then, real estate prices have significantly increased. He stated, “The government should charge 1% GST on under-construction housing properties, costing up to ₹75-80 lakh each, to boost demand for affordable and mid-income housing.” This move, according to Irani, would benefit homebuyers by offering lower tax rates on more expensive properties that fall within the new cap.
Currently, 1% GST is levied on under-construction affordable homes priced up to ₹45 lakh, while those priced above ₹45 lakh are taxed at 5%. Irani added that the government might also consider removing the price cap on affordable housing and instead focus on the carpet area, with a limit of 60 square meters in metros and 90 square meters in non-metros.
CREDAI's president-elect, Shekhar Patel, also highlighted the importance of tax incentives to boost housing demand. He suggested that the government should provide a 100% deduction on interest paid on home loans under the Income Tax Act, instead of the current exemption of ₹2 lakh. This, he believes, would significantly enhance the demand for affordable and mid-income housing.
Manoj Gaur, chairman of CREDAI, emphasized the need for improvements in the ease of doing business in the real estate sector. He pointed out that obtaining government approvals for real estate projects can take more than a year, which is a significant bottleneck for developers. Streamlining this process could accelerate project development and contribute to the overall growth of the sector.
In addition to these policy suggestions, CREDAI is undertaking several social initiatives to mark its 25th anniversary. The organization plans to upgrade 1,000 government schools across the country in partnership with an NGO. Each school will receive close to ₹11 lakh to enhance facilities such as smart classrooms, water, and sanitation. CREDAI also intends to construct green buildings and plant trees to create urban forests. Furthermore, the body will skill close to 5 lakh construction workers across the country to improve the quality of construction and job opportunities in the sector.
CREDAI was established in 1999 and has over 13,000 members from various cities across India. The organization plays a crucial role in representing the interests of real estate developers and promoting the growth of the real estate sector in the country.
Frequently Asked Questions
What is the current cap on affordable housing in India?
The current cap on affordable housing in India is set at ₹45 lakh, which was established in 2017.
What is CREDAI's suggestion for the new cap on affordable housing?
CREDAI has suggested increasing the cap on affordable housing from ₹45 lakh to ₹75-80 lakh to better align with current real estate prices.
What is the proposed GST rate for under-construction homes priced between ₹75 and ₹80 lakh?
CREDAI has recommended a 1% GST rate for under-construction homes priced between ₹75 and ₹80 lakh to boost demand for affordable and mid-income housing.
What additional tax benefit does CREDAI suggest for homebuyers?
CREDAI suggests that the government should provide a 100% deduction on interest paid on home loans instead of the current exemption of ₹2 lakh to boost housing demand.
What social initiatives is CREDAI undertaking to mark its 25th foundation day?
CREDAI is upgrading 1,000 government schools, constructing green buildings, planting trees to create urban forests, and skilling 5 lakh construction workers across the country.
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