The recently launched Budget 2013 will have an adverse impact on the luxury housing segment. Experts opined that the prices will shoot up in the luxury housing segment.
Was the Budget 2013 really a tolerable one? Though many of the experts have expressed that the budget 2013-14 was a moderate one, looking at the fate of luxury housing segment they may rewrite or overwrite on what they have said or written earlier. Here let us see how the budget will have an impact on the real estate sector as a whole and particularly on the luxury housing segment.
It is true that the real estate sector as a whole has received a slight help from the budget. Precisely saying only the affordable housing segment received a boost from the budget. On the other end, the budget 2013 has slapped on the top earners by imposing additional charges on them.
Luxury homes will be more expensive for the buyers as the budget reduced the rate of reduction on homes and flats from 75% to 70%. The revised deduction will be applicable to all homes and flats with over 2000 sq. ft.
Another criterion of the deduction rate is its price. The revised deduction rate will be applicable to those properties worth Rs.1 Cr or above.
The deduction will have an impact on the service tax which will also be levied on to the home buyers. So in short, the luxury homes will be more expensive with the budget 2013.
As per a recent report by Jones Lang LaSalle India, around 182 luxury housing projects are launched in the top seven cities. The total value of these projects would reach $30 billion.
JLL India chief Anuj Puri said that the impact will be more on top cities like Bangalore, Delhi, Mumbai and Hyderabad, which offer homes over Rs.1 Cr mark. Other top cities like Chennai and Pune also will be affected to a certain extent, as they also offer luxury homes over Rs.1 Cr. However these cities do not offer such homes in vast numbers.