Realtors to press for demands once again; want interest rate cut

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New Delhi: Realtors are meeting deputy chairman, planning commission, Montek Singh Ahluwalia this week once again to put forward their demands, which they feel would enable them to tide over the current crisis.

Real estate body, National Real Estate Development Council (Naredco) members met Montek twice last week to put forward their demands.

The main demands include lowering of interest rates, restoration of 80 IB, giving infrastructure status to the real estate sector.

Other demands include restructuring of debt, increasing the debt moratorium by one year, giving tax rebate to home buyers upto Rs 3 lakh.

“Our talks with the government have been very positive. I am hoping more interest rate cut for home loans will take place very soon.” said Rohtas Goel, chairman, Omaxe. He also added that there is no scope for slashing housing price right now.

Naredco has placed some demands before the government, which they feel will spur demand in the segment. It wants interest rates on home loans below Rs 5 lakh to be 6.5%, between Rs 5 lakh and Rs 30 lakh to be 7.5% and above Rs 30 lakh to be 9.5%.

Developers want tax benefits under section 80 IB which was withdrawn in 2007.

With liquidity problems in this sector developers are finding it difficult to service their loans, as a result they want the debt moratorium to be extended by one year. If the sector gets infrastructure status, banks will be more generous in extending loans to this sector and external borrowings will also come easy.

Some of the other demands placed on the table by Naredco include rental rates and tax rebates. Developers think if tax rebate is extended upto Rs 3 lakh compared to the present Rs 1.5 lakh, it will act as an incentive for home loan buyers to invest in homes.

Realtors are demanding that there should be a 50% concession of tax for the rental income of the general category and 100% concession for senior citizens and women.

This demand is probably to make buyers to go for a second home which they may want to rent out.

About three weeks prior to their meeting with Montek, realtors had met Kiran Dhingra, secretary of the ministry of housing and urban poverty alleviation and placed demands like scrapping of service on construction sector and cheaper and quicker funding.

Other measures that developers wanted Dhingra to look into include creation of special residential corridors (SRCs) much like special economic zones (SEZs) which will have plenty of tax exemptions.

Brick-by-brick

• National Real Estate Development Council members met Montek twice last week. To meet him again this week

• The main demands include lowering of interest rates, restoration of 80 IB, giving infrastructure status to the real estate sector

• Other demands include restructuring of debt, increasing the debt moratorium by one year, giving tax rebate to home buyers up to Rs 3 lakh

• Realtors demand there should be 50% tax concession on the rental income of the general category and 100% concession for senior citizens and women