Real Estate bodies seek to develop more properties under the affordable housing scheme.

With finance minister Nirmala Sitharaman on February presenting the Union Budget 2020-21, real estate chambers pursued to dilute the definition of affordable housing in order to enable more properties to fall within its scope and take advantage of the opportunities.

The concept of affordable housing currently means a house or flat in non-metropolitan cities and towns, with carpet area up to 90 square metres, and in metropolitan cities with 90 square metres with a value up to Rs 45 lakh, for both.

A revision in the definition of affordable housing has been sought by CREDAI (the Confederation of Real Estate Developers Association of India).

The following definition may be generally applicable across all government agencies: “Affordable housing includes units with a carpet area as defined by RERAs not more than 60 square metres in the metropolitan areas and 90 square meters elsewhere,” said President of CREDAI (National) Satish Magar in the Recommendation Note.

In a recent note to the finance ministry, the National Real Estate Development Council also suggested that all houses in the Mumbai Metropolitan Region (MMR) and most of them in the National Capital Region (NCR), are not been qualified as an affordable housing, resulting in a loss of benefit of 1% GST reduction and a tax exemption benefit from these projects.

“We recommend the immediate abolition of the price cap condition of Rs 45 lakh and restoring benefits to all residences covering less than 60/90 square metres,” he said.

In addition to lower GST, another significant advantage of affordable housing is that industry status in the market has been given to make projects eligible for cheaper bank loans. Developers also want a one-time roll-out or modification of developers’ loans among other demands.

CREDAI said, in its recommendation: “The lack of liquidity remains a problem for the real estate sector. A single-time turnaround regime with a moratorium principal and interest of 2 years is therefore needed on an immediate basis”.

NAREDCO in its latest not asserted to the Minister of Finance that government recent steps to resuscitate the real estate industry has not produced results and that it should provide developers with, among other plans, a one-time rollout or restructuring of loans taken by developers.

CREDAI President Magar also stated that housing loans of up to Rs 1 crore could belong to “priority sector” and interest rates to be below 7% effectively.