Pune: Construction industry majors have welcomed the Union government’s proposal to promote rental housing by offering tax rebate on the income generated by way of house rent. However, they say the proposal needs to be supplemented with a series of reforms in the housing policy.
Presently, rent earned is added to an individual’s annual income and is taxed. Under the new proposal mooted by the urban poverty alleviation ministry, rental income is sought to be excluded from the annual income-tax.
“The move will increase investments in housing. People will buy houses and rent them out to earn a taxfree income,” Kumar Gera, president of the Confederation of Real Estate Developers Association of India (CREDAI), told TOI.
Gera, who was on the task force which recommended the proposal to the government, said people would put their surplus money in housing, which in turn would help increase the Gross Domestic Product (GDP). Also, as more houses will be available in metro cities at an affordable rent, finding a suitable place to live will become easier for professionals who often move from city to city, he added.
“We support this proactive approach of the government, which will go a long way to promote rental housing in India,” Lalitkumar Jain, president of the Promoters and Builders Association of Pune (PBAP), told TOI.
Jain, however, felt that the state needs to grant more protection to house-owners in metros by modifying the Maharashtra Rent Control Act. Many investors are afraid to rent out their properties for fear that the tenants may not vacate the premises. This is particularly true about cities like Mumbai, which has led to a number of flats lying vacant.
TO LET
• 2% owned flats lying vacant in Pune, 9% in Mumbai
• Many owners fear tenants may not vacate premises
• Tax rebate on rental income will boost investment in housing, say builders
• Others fear that demand for houses will rise, and so will property rates
‘Govt. move will put pressure on existing land resources’
By Abhijit Atre/TNN
Pune: The government’s proposal to promote rental housing by offering tax rebates has been welcomed by the construction industry.
But according to Lalitkumar Jain, president, Promoters and Builders Association of Pune (PBAP), the Maharashtra Rent Control Act should also be modified. He said common investors are afraid to rent out properties for fear that tenants, by using the Act, may not vacate their premises.
Jain said around two per cent flats are vacant. As per national estimates, around nine per cent houses in metros remain locked. “Rental housing will get a major boost if a mere complaint by the landlord with the police, informing that a tenant is refusing to vacate the premises after the expiry of the agreed rental term, leads to immediate removal of the tenant,” Jain said.
Jain admitted that the current legislation allows an owner to enter into a 11-month agreement with the tenant, but pointed out that in case of default by the tenant, the litigation continues for years in court.
While lauding the government’s proposal, president of the Marathi Bandkam Vyavasayik Sanghatana S.R. Kulkarni, however, pointed out that this will further increase the demand for housing and put pressure on the existing land resources in metros, leading to a further price hike.
“The proposed tax rebate to investors for renting their houses is undoubtedly a welcome move. However, if it has to benefit the common middle-class citizens, it should be affordable for them to buy property in the first place. The government and the industry players need to give a serious thought to the issue and undertake measures to stabilise the land prices" Kulkarni said
Presently, rent earned is added to an individual’s annual income and is taxed. Under the new proposal mooted by the urban poverty alleviation ministry, rental income is sought to be excluded from the annual income-tax.
“The move will increase investments in housing. People will buy houses and rent them out to earn a taxfree income,” Kumar Gera, president of the Confederation of Real Estate Developers Association of India (CREDAI), told TOI.
Gera, who was on the task force which recommended the proposal to the government, said people would put their surplus money in housing, which in turn would help increase the Gross Domestic Product (GDP). Also, as more houses will be available in metro cities at an affordable rent, finding a suitable place to live will become easier for professionals who often move from city to city, he added.
“We support this proactive approach of the government, which will go a long way to promote rental housing in India,” Lalitkumar Jain, president of the Promoters and Builders Association of Pune (PBAP), told TOI.
Jain, however, felt that the state needs to grant more protection to house-owners in metros by modifying the Maharashtra Rent Control Act. Many investors are afraid to rent out their properties for fear that the tenants may not vacate the premises. This is particularly true about cities like Mumbai, which has led to a number of flats lying vacant.
TO LET
• 2% owned flats lying vacant in Pune, 9% in Mumbai
• Many owners fear tenants may not vacate premises
• Tax rebate on rental income will boost investment in housing, say builders
• Others fear that demand for houses will rise, and so will property rates
‘Govt. move will put pressure on existing land resources’
By Abhijit Atre/TNN
Pune: The government’s proposal to promote rental housing by offering tax rebates has been welcomed by the construction industry.
But according to Lalitkumar Jain, president, Promoters and Builders Association of Pune (PBAP), the Maharashtra Rent Control Act should also be modified. He said common investors are afraid to rent out properties for fear that tenants, by using the Act, may not vacate their premises.
Jain said around two per cent flats are vacant. As per national estimates, around nine per cent houses in metros remain locked. “Rental housing will get a major boost if a mere complaint by the landlord with the police, informing that a tenant is refusing to vacate the premises after the expiry of the agreed rental term, leads to immediate removal of the tenant,” Jain said.
Jain admitted that the current legislation allows an owner to enter into a 11-month agreement with the tenant, but pointed out that in case of default by the tenant, the litigation continues for years in court.
While lauding the government’s proposal, president of the Marathi Bandkam Vyavasayik Sanghatana S.R. Kulkarni, however, pointed out that this will further increase the demand for housing and put pressure on the existing land resources in metros, leading to a further price hike.
“The proposed tax rebate to investors for renting their houses is undoubtedly a welcome move. However, if it has to benefit the common middle-class citizens, it should be affordable for them to buy property in the first place. The government and the industry players need to give a serious thought to the issue and undertake measures to stabilise the land prices" Kulkarni said
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