Realtors seek dilution in definition of affordable housing

With the Finance Minister set to present the Union Budget 2020-21 in Febuary, the Confederation of Real Estate Developers Association of India (CREDAI) has sought a dilution in the definition of affordable housing, so that more properties could come under its ambit and avail the benefits. Currently, affordable housing is defined as a house or flat with a carpet area up to 90 sqm in non-metropolitan cities and towns, and 60 sqm in metro cities, and a value up to ₹45 lakh, for both. Satish Magar, President, CREDAI (National) suggested that the carpet areas as defined under RERA should not exceed these. The National Real Estate Development Council (NAREDCO), in a recent note to the Finance Ministry, suggested that all the houses in the Mumbai Metropolitan Region (MMR) and most of them in the NCR do not qualify as affordable housing, resulting in loss of benefit of reduced GST of 1% and tax exemption.

It recommends that the condition for price cap of ₹45 lakh be abolished and the benefits be restored to all the houses that have areas less than 60/90 sqm. Since affordable housing has been accorded industry status, the projects are eligible for cheaper bank loans. Among other demands, developers also want a one-time roll-over or restructuring of loans taken by developers. CREDAI, in its recommendation, said: "Liquidity shortage continues to cause distress in the real estate sector. Hence, a one-time restructuring scheme with moratorium on principal and interest of 2 years is needed." NAREDCO also informed the FM that recent measures by the government to revive the realty sector have so far not yielded results. CREDAI President said that housing loan up to ₹1 crore may be counted towards 'priority sector' and interest rates to be below 7%.