The government has announced sops on Monday at a lower cost of housing should have a significant impact on the affordability of these homes, and encourage developers to enter the segment.
Ravi Ramu, CFO of Puravankara Projects, whose subsidiary Provident Housing plans some major affordable
">
Housing projects, said of the interest subsidy of 1% on loans of up to Rs 10 lakh could mean a reduction of the borrower by EMI Rs 650 to Rs 750, depending on the duration of the loan. "Since EMIS is likely to be about Rs 11,000, it is a significant reduction,''he said.
As the government's announcement, the value of the house who is eligible for the subsidy can go up to Rs 20 lakh, but the subsidy will be applicable on loans up to Rs 10 lakh.
The move to extend for two years, the tax exemption available to manufacturers of small houses is likely to convince manufacturers to reduce the cost of these houses. Sunil Krishnan, chairman of Confiant, estimates that it would be possible to lower the price offered to the purchaser of 5%.
The government has extended the provisions of section 80IB (10) of the Tax Act for projects approved before March 2008 and be completed before 2012. Previously, the provision is limited to projects sanctioned before March 2007 and be completed before March 2010.
The extension exempts manufacturers from paying tax on income from the sale of homes 1000 square feet of built-up area of 25 km in the city limits of
">
Major cities and 1,500 square feet in other areas.
Some say that very few projects have been launched during the extended period, it is unlikely that it will have a major impact.
But confident that the launch of projects during this period, said they will now be able to offer more aggressive price for them. This could help stimulate demand and to allow for the completion of projects in 2012.
The greatest impact of the two measures is regarded as being in "feeling.'' "It sends the message that the Government believes that the houses of Rs 20 lakh is a separate category, it is important to focus on it to provide housing for the masses,''said Ramu.
A number of developers have discussed in this segment. The latest action could drive him sooner than later.
Fore more information visit this site:
