Union Budget 2018—Real estate holds strong
With major reforms attempting to re-organize the real estate sector last year, the recently presented Union Budget 2018 was much anticipated by industry players. The finance minister’s presentation on 01 Feb 2018, however, has brought about a balanced outlook for the real estate industry. Along with a clear focus on affordable housing, the 2018 Budget indicated other focal points that we are excited about.
- 1. Bengaluru suburban railway gets a boost
- 2. Blockchain to make real estate acquisitions more secure
- 3. Smart cities need smart homes
- 4. It’s now a buyer’s paradise
- 5. Road infrastructure will increase livability quotient
The Minister of Finance, Mr. Arun Jaitley’s announcement of “a suburban network of approximately 160 kilometers at an estimated cost of `17,000 crore being planned to cater to the growth of the Bengaluru metropolis,” couldn’t have come at a better time. Bengaluru at present is the 18th most populous city in the world, with a ten million plus population, in the urban areas alone. It is also the fastest-growing Indian metropolis after New Delhi, covering an area of 741 km2.
With better connectivity, and faster transportation facilities, the city of Bengaluru can expect a greater boost. The extension of the suburban network will facilitate faster commute for residents and help them enjoy more time at their homes, that they helped design and build with much attention to detail. The strengthening of the transport infrastructure will further help the city graduate from the current preferred choice of homebuyers, to one of the top prime destinations to own a dream homes.BHADRA Group is committed to support this goal of Bengaluru city becoming a dream city for homebuyers.
“Distributed ledger system or the block chain technology allows organization of any chain of records or transactions without the need of intermediaries. The Government will explore use of block chain technology proactively for ushering in digital economy,” announced Mr. Arun Jaitley, Minister of Finance, at the 2018 Budget presentation. Blockchain while increasing the authenticity and security of online financial transactions also reduces the cost of such transactions. It further serves as a solution to digital transaction challenges such as double spending and currency reproduction.
Financial and title document legitimacy is a huge concern in construction and real estate, and blockchain technology serves a vital deterrent to this. With IDC predicting that the global spending on blockchain solutions in 2018 is estimated to reach 2.1 billion dollars, blockchain enabled smart contracts can speed up the process of ownership transfer and verification. Sarveshaa S B, MD, BHADRA Group agrees, “BHADRA Group has always prided itself to be a clean real estate developer offering 100% secure and legally compliant properties. This renewed focus by the government on ensuring security and compliance is welcomed by us, as BHADRA Group is committed to offer completely compliant lifestyle spaces to its clients.”
The 2018 Budget also saw a new update regarding smart cities. “Smart Cities Mission aims at building 100 Smart Cities with state-of-the-art amenities. I am happy to inform that 99 Cities have been selected with an outlay of 2.04 lakh crore,” announced Mr. Arun Jaitley, Minister of Finance. Smart cities focuses on developing an urban eco-system of comprehensive development that is inclusive of institutional, physical, social and economic infrastructure.
Bengaluru is one of the Tier 1 cities selected for the smart city initiative, and the technology-enabled growth brought about by the Smart Cities Mission will improve living quality tremendously. A big part of smart cities will be the development of physical infrastructure, including the large-scale acceptance of smart homes. Presently, several Indians are opting for smart homes, with the increase estimated to be around 15-18% in Tier 1 cities and 5-10% in Tier 2 and Tier 3 cities.
Pawan Chowgule, VP, Business Development, BHADRA Group, elaborates how the company will support the Bengaluru smart city initiative. “With a high focus on technology in design and lifestyle space utility, BHADRA Group is a great proponent of using technology to improve living spaces and ease of living. The forthcoming advancements in the city infrastructure will be ably supported by BHADRA Group constructions, elevating the lifestyle of the city dwellers to true luxury.”
“I propose to provide that no adjustment shall be made in a case where the circle rate value does not exceed 5% of the consideration,” announced Mr. Arun Jaitley, Minister of Finance. Proposed with the intention to “minimize hardships in genuine transactions,” the proposition if approved by Parliament, will ensure that if a property is sold below the circle rate, the seller will be exempted from calculating capital gains on the differential amount. Furthermore, the buyer will be exempted from having to pay taxes on the property.
With no hikes in circle rates, real estate buyers would not have to worry about prices going up. Investments and home buys couldn’t have asked for more, since if a home owner buys an apartment where the circle rate value does not exceed 5% of the consideration, the seller will not be required to calculate capital gains on the differential amount, and the buyer would be exempted from paying taxes on it.
This opens up the market for homes located in prime locations. Homebuyers should make use of this as a prime opportunity for a long-term investment or home buy.
“Development of roads around 1,500 km length of 1,053 roads out of which around 1,000 km length of 600 roads has been completed and the remaining 1,000 km road will be completed by end of March 2018,” announced the Chief Minister Siddaramaiah, while presenting the 2018 Karnataka State Budget. As part of the Rs 17,196 crore that has been allocated to Urban Development with a focus on Bengaluru, the announcement is a welcome move to the city’s residents.
The funds devoted to infrastructure will bring a positive contribution to Bengaluru’s liveability quotient. As one of the leading hubs of IT, biotech and innovation, the boost in infrastructure will encourage investments form companies and attract talent from all over the country. Commuting will become easier and citizens will be able to enjoy their homes and the city more. With real estate and infrastructure development having a symbiotic relationship, BHADRA Group wholeheartedly supports the infrastructure development that will improve the liveability quotient of Bengaluru city.