Governments contribution to setting India's Housing in order
There is no doubt that the Government of India is running the extra mile to set the nation’s housing in order. With the introduction of numerous bills and regulations, Prime Minister Narendra Modi has been keeping a close eye on the real estate sector with the prime motive of making properties affordable to all and keeping the sector clear of any illegal transactions. Let’s take a look at few of the measures taken up by the government to make real estate the real deal.
Real Estate Regulatory Authority
As the name suggests, the Real Estate Regulatory Authority (RERA) bill was implemented to introduce much-needed regulation in the real estate industry. The bill was passed to increase transparency in transactions for the benefit of both home buyers and property developers with the primary objective of keeping fraudulent activities at bay. Developers are required to register their developments under the Real Estate Regulatory Authority in order to be showcased as RERA certified. The reforms presented by the bill include:
- RERA bodies introduced at state-level to maintain financial transparency.
- A dedicated bank account reflecting 70% of the proceedings for each on-going development to ensure timely completion of the project.
- Properties to be priced based on the carpet area and not the built-up area so consumers will be paying only for the area they will be using.
- Assurance of high-quality construction, with the buyer getting the advantage of approaching the builder to correct any defects in the property even after one year of handover.
Housing for all by 2022
The Central Government of India launched the Pradhan Mantri Awas Yojana to ensure home ownership for buyers from all income brackets, by the end of 2022. The main highlight of this initiative is to provide subsidies on the interest of home loans taken by an individual from the middle and lower income groups. Since this progressive scheme aims at helping every citizen feel the pleasure of owning a home irrespective of their financial background, the program is broadly classified into two categories:
The PMAY Urban scheme caters to the urban population of the nation who fall under the category of Lower Income Groups (LIG), Middle Income Groups (MIG) or Economically Weaker Sections (EWS). These individuals reside in rented accommodations since buying a home in an urban city is not economically feasible for them.
PMAY Gramin is also applicable for individuals who fall under the category of Economically Weaker Sections (EWS), Lower Income Groups (LIG) and Middle Income Groups (MIG), who are residing in the rural areas of the nation. These citizens can avail subsidies on their home loans and fulfil their dreams of owning a home.
In an attempt to encourage Indians from all walks of life to own a home, these schemes are valid only for first time home buyers whose annual family income does not exceed 18 lakhs. The subsidy ranges anywhere between Rs 1 Lakh to Rs 2.30 Lakhs with a 6.5% subsidy on the interest rate.
The Goods and Service Tax
The structured tax reforms brought in by the Goods and Service Tax (GST) has created a huge positive impact on the real estate sector of the nation. Home buyers are now obliged to pay a single tax blanket of 12% across the country, which covers a plethora of taxes including value-added tax (VAT), stamp duty, service tax and other registration charges. This has made transactions extremely transparent and hassle-free for both first time home buyers and seasoned investors.\
The Goods and Service Tax also benefits property developers with the advantage of reduced costs. Since the primary motive of the reform is to replace the cascading tax structure with a centralised tax, the overall cost of construction gets drastically reduced. This has a domino effect on the final price of the property.
Smart cities and townships
The introduction of the concept of smart cities is yet another ambitious measure taken up by the Indian Government as an attempt to speed up the urbanisation process of the country. The scheme was launched by first identifying the areas of the nation that are showing fast-paced growth, and funding them generously, to pave the way for the next batch of smart cities. The end result will be a series of developed and well-established cities that will cumulatively make India stand out on the global map.
The funds allotted to the smart city are used to develop all the key parameters that differentiate it from other areas like excellent infrastructure, unmatched connectivity, top-notch water and power supply and well-renowned medical and educational centres, to name a few. These localities also feature a well-monitored waste management system and environmental programs to progressively upgrade the country from a developing nation to a developed one.
These remarkable measures are proof that the Government of India is leaving no stone unturned to set the nation’s housing in order. With such spectacular schemes in place, it is time you take the leap and invest in real estate today. Head out to the Brigade Group for stunning ready-to-occupy apartments built in the top residential locations of Bangalore, Mysore and other leading cities of India.