Slew Of Changes In Affordable Housing Definition Perplexed Realtors
A slew of changes in the basic definition of affordable housing in the last three years has perplexed realtors in the low-cost housing segment.
The government launched “Housing for All” in 2015, it has effected changes in the benchmark of affordable housing for subsidy thrice. This (the definition changes) absolutely makes no sense. I wonder who is advising the government on it, the managing director of a low-cost housing enterprise said.
In its latest definitional expansion in June, the government had said interest subsidies will be expanded to those in the middle-income group who buy houses of up to 200 sqm (2,152.78sqft). The subsidies are for Rs 2.30 lakh and in two income brackets Rs 6-12 lakh and Rs 12-18 lakh.
What is confusing many about this latest definitional change is that there would be very few first-time buyers (a pre-requisite for the subsidy) with women co-borrowers (again, a pre-requisite) in this 2,000-plus sq ft segment.
This is not the first time that the government has affected a size change. In the Union Budget speech of 2017-18, the finance minister had said in order to make this scheme more attractive, I propose certain changes. First of all, instead of the built-up area of 30 and 60 sqm, the carpet area of 30 and 60sqm (330-660sqft) will be counted in metro and non-metro areas, respectively.
These provisions related to 100% tax exemption on profit for those builders who make the house of these sizes and gave them five years to complete their projects (which was decided at three years earlier).
The government has been trying a lot of things. The earlier definition of just sticking to the income criterion for rolling out subsidies was better. There was no need to get into size definitions, Sachin Kulkarni of Vastushodh said.
Since developers make a sale on the built-up area, the change meant many developers started doling out project offerings that were about 850 sqft in the saleable area in places like Pune.
According to experts, one possible reason why the government has been “all over the place” with its constant changes is probably the low-offtake under the Credit-Linked Subsidy Scheme (CLSS). The available data shows just 1.33 lakh people in the sub-Rs 6 lakh income segment have so far benefited from the scheme in over three years.
The government should instead relax the norms. It can keep the subsidy tap open to anyone whose assessed income is under Rs 6 lakh, said a senior banker, adding, it also needs to stick to one policy and extend tax benefits to only those developers who make houses for the low-income group.
Source Link- https://timesofindia.indiatimes.com/