Real estate sector demands industry status
The real estate sector, having gone through a rough patch last year after the implementation of the Real Estate Regulatory Authority (RERA) and the introduction of Goods and Services Tax, following the November 2016 demonetisation, is hoping that the Centre would consider its long-standing demands in this year’s budget.
This includes the categorisation of the real estate sector as an industry which will enable developers to raise funds at lower rates.
On Wednesday, several leaders from the sector shared their pre-budget expectations at a panel discussion organized by the International Real Estate Federation FIABCI-India chapter. Abhishek Goenka, Partner, PricewaterhouseCoopers (PWC), said, “It is time we moved away from viewing budget as the holy day when all policy decisions are announced. There is no need for today’s government to wait for this one day to make decisions.”
According to Farook Mahmood, world president of FIABCI (French acronym for “Federation Internationale des Administrateurs de Bien-Conselis Immobiliers”, which means “The International Real Estate Federation”), there was a need for changing current levies and laws as applied to the real estate sector. “Many lead to double taxation as well as pushing up costs. When developers are finding it difficult to offload stock, the current set of regulations increase the holding cost of the industry,” he said.
Architect Naresh V Narasimhan, also part of the panel, said, “The funny thing is that most big players in Bengaluru have complied with RERA regulations. Big players have gone one step beyond compliance. What we need is self-enforcing guidelines when developers are willing to sign affidavits and be held culpable for diversions from plans, there needs to be innovative solutions as the cost of capital is pushing up prices.”
Narasimhan suggested a scheme in which developers pledged the ground floor of their projects to the civic agencies on the condition that it would be released back to them if they complied with all regulations.
Taxation expert KR Chandy of Ernst and Young said the sector should come together to demand better conditions from the Government.
“Are we really playing a small game here? Today, there are buckets of funds available for start-ups but support for the real estate sector is lacking. Do we have it in us to create a voice for ourselves?” he asked while criticising the RERA Act for having loopholes which he said would start troubling developers once the regulator became active.
On the issue of double taxation, Rajiv Khaitan, partner, Khaitan & Co, said, “Digitization and the availability of technology has negated the requirements like stamp duty and registration systems as these can be carried out online in a much more secure manner. Is stamp duty needed in today’s age of technology?”