Affordable housing gets infrastructure status

New Delhi: Aiming to boost real estate sector and achieve 'Housing for All', the government on Wednesday announced infrastructure status to affordable housing for encouraging investment in this segment and offered tax sops to developers sitting on completed but unsold homes.

National Housing Bank will refinance individual housing loans of about Rs 20,000 crore in 2017-18, Finance Minister Arun Jaitley announced in his Budget speech.

To promote affordable housing, the government relaxed the condition of period of completion of the project from current 3 years to 5 years. Measurement norm of housing has been changed to carpet area from built-up area, which will increase the area and make more projects eligible.

With a view to promoting the real estate sector and to make it more attractive for investment, the government proposed to reduce the capital gain tax liability on immovable property.

"We propose to facilitate higher investment in affordable housing. Affordable housing will now be given infrastructure status, which will enable these projects to avail the associated benefits," Jaitley said.

With grant of infrastructure status, a long standing demand of realtors, builders would now be eligible for several government incentives, subsidies, tax sops and institutional funding for low cost homes, real estate industry said, while hailing this move.

With surplus liquidity created by demonetisation, he said the banks have already started reducing their lending rates, including those for housing. Interest subvention for housing loans has also been announced.