Real Estate is very much affected by annual budget. Every year the Budget decides what will be the future of a country’s real estate. It effects all of us as we are all connected with real estate in some or the other way. Many of us already own a home, while many are looking to buy one whereas many live in rented property. This budget 2019 will add to your pocket and will definitely want you to invest more in properties as a real estate buyer.
Also, with a vision of achieving Housing For All by 2023, this current govt. has taken many bold steps. This budget is a pathway towards the achievement of that vision. This Budget is a win win situation for both home buyers and home seekers and specially for existing home owners.
Benefits under Budget 2019 for Real Estate buyers
Exemption in Capital Gains and Deemed rent.
Relaxation in Capital Gains
Prior to these amendments, if you re-invest your capital gain in another property then you’ll get an exemption only if you re-invest it in only one property. If you will re-invest your capital gain in two property then you won’t get the relaxation on the second property.
This has been amended and you can get relaxation even if you re-invest your capital gain in two property. This relaxation will be provided only if the amount of your capital gain does not exceeds Rs. 2,00,00,000 (two crore rupees) and this only a one time relaxation.
This is a very practical approach as many family’s sell their property in order two buy two different ones, so that when their family grows then they can live separately. Doing this would have costed more if not for this amendment in budget 2019.
Deemed Capital Rent
If you have more than one property then while calculating taxation on housing income it is assumed that you are living in one of your property and the other properties are set on rent by you (even if the other properties are empty or vacant) and the tax on those vacant properties are calculated on the basis of their rentable value. This was a problem for owners owning more than one properties.
The amendment in the budget 2019 now allows a person to own two properties instead of one on which he won’t have to pay housing income tax even if his second property is vacant. Lets say, a person owns 3 properties where he lives in one of the property, his second property is on rent and his third property is vacant. Now he won’t be liable to pay the assumed rent on his 3rd vacant property and it’ll be assumed that he himself has occupied his 3rd vacant property.