Budget 2016 Pushes Demand & Supply of Affordable Housing

Latest Housing News, Schemes & Projects | By Rajkumar

Yesterday, the Finance Minister, Arun Jaitely announced the budget for financial year 2016-17. In Budget 2016, the government has proposed to push the affordable housing across the nations. The announcement of government will help the supply of affordable housing and will also help to reach the demand of housing for all. Here are some major points included in the budget 2016 for affordable housing.

  • Budget 2016 allows the four metro cities, a deduction of 100 per cent for profits to housing projects building homes up to 30 square meters and 60 square meters in other cities.
  • Construction of affordable houses up to 60 square meters under any scheme of the Central or State Government including PPP Schemes will be exempt from service tax.
  • First time home buyers will get deduction for additional interest of Rs 50,000 per annum for loans up to Rs 35 lakh sanctioned in 2016-17, where house cost does not exceed Rs 50 lakh.
  • The budget has also increased the limit of deduction of rent paid under section 80GG from Rs 24,000 per annum to Rs 60,000, to provide relief to those who live in rented houses.

The CEO of Housing.com, Jason Kothari said that the government’s service tax exemption on houses less than 60 sq m, and the additional exemption of Rs 50,000 for housing loans up to Rs 35 lakhs for homes not above Rs 50 lakhs will both likely improve first-time home buyers’ sentiment.

The deduction of home loan interest will further encourage buyers to invest more in this segment. This will further encourage private participation in affordable housing. The housing sector will get a push from both supply and demand side.

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