‘Need to give tax incentives to boost real estate sector’

Source: The Hitavada      Date: 11 May 2018 11:25:20


 

Business Bureau,

FROM the past three years, the real estate sector is witnessing a slowdown due to the rising property prices, labour and construction costs thereby leaving little room for the people with lesser incomes to buy a dream home of their own.
“In order to give a boost to the real estate sector, tax incentives should be given by the Government,” said Kishore Rai, Managing Director of Rai Udyog Limited in an interview with The Hitavada on Thursday.


Rai said that the taxes on real estate had shot up tremendously. Buying a new home had become a distant dream. During the registration of property, the Goods and Services Tax (GST) was applicable at 12 per cent. Earlier, the Service Tax was applicable at only 4 per cent. To worsen the situation, Stamp Duty was applicable at Rs 8.5 per cent. “This means a person has to shell out 20 per cent more as taxes on the cost of property. This is a huge amount by any standard,” he pointed out.


Rai suggested that the GST should be abolished on dwelling units priced below Rs 30 lakh. This move would certainly boost the real estate sector and provide benefit to the people with lower income to buy homes. Also, the ready-reckoner rates needed to be reduced. Rai said that he had been successful in real estate as he offered affordable prices, early possession and left no room for overhead expenses. All the projects had been constructed using self-finance. Builders should not borrow money or raise finance from banks or money lenders to complete a project.


Rai has built an impeccable reputation over the years. He established his company in 2001 and has successfully completed 40 projects. His latest project -- Rai Galaxy, near Kadbi Square, Kamptee Road, comprising of 45 2BHK flats, 14 shops and four tenements, was fully booked on May 6 by 3 pm. This was a record of sorts and a big achievement considering the slowdown in the real estate sector, he said.


The builder has three large dream projects in the pipeline which will be launched within the next few months. He will be launching Rai Tower at Teka Naka consisting of eight floors and 150 flats with affordable prices of about Rs 20 lakh. Another project, New Jaripatka, at Jaripatka will consist of 300 row houses priced between Rs 25 lakh and Rs 30 lakh. The third project -- Rai Hospital -- located near Bus Stand comprising G+7 floors, has already been constructed. It would offer services at affordable rates, he added.