Reforms will be undertaken to promote rental housing, current laws archaic, says FM Nirmala Sitharaman

In view of the housing shortage in India and the objective Housing for All by 2022 the government was expected to give a big boost to Rental Housing, In the budget wish-list, an association of real estate developers across the country, NAREDCO has recommended various incentives to promote rental housing. 

NAREDCO President Niranjan Hiranandani expects to improve the effective ROR from renting, it was suggested that the deduction from rental income under Section 24(a) be increased from 30 per cent to 50 per cent as this process will promote rental housing in the country. 

In an announcement, FM Nirmala Sitharaman said,  "Several reforms would be undertaken to promote rental housing, current rental laws are archaic as they do not address lessor-lessee relationships fairly"

According to PTI report, The association also suggested that 10-year tax holiday be given to real estate developers on profits earned from rental housing. That apart, the association sought deduction on expenses like interest and brokerage that the goods and services tax on maintenance charges of residentials complexes should be totally exempted. 

Sarojini Ahuja VP, Sales & Marketing, Transcon Triumph told Zee Business Online that, "The Government will be undertaking several reforms to promote rental housing. With regards to the housing shortage in the country, this will be a big boost to the real estate sector. The Government also proposes NRI portfolio investment route to be merged with foreign portfolio investment route. This will lead to increase in NRI investments in Indian capital market."

He further added, "The decision to allow foreign institutional investors to subscribe to REITS and INVITs is also a welcome move. The Government has also proposed to relax local sourcing norms for FDI."

Also said, "FDI in real estate will provide a significant boost to the sector in terms of greater foreign capital inflows thus creating more job opportunities and revitalizing the growth of the realty sector. "