There is a general expectation in the Indian Housing Industry that the taxes and duties relating to housing sector, like taxes on building materials, stamp duties on property purchase are going to be reduced in the budget 2008-09. The base of this kind of expectation is the comments of the Indian Trade Minister, Kamal Nath, in favor of reduction of the levies and duties relating to real estate sector.
The Indian Trade Minister said that, he will favor a cut in the duties imposed on building and construction materials. At present these duties are being imposed at a high rate and according to him cut in these high duties will be able to stimulate demand in the housing sector . He hoped that, through demand stimulation the Indian housing sector will experience another boom and will be able to sustain the existing high growth rate.
It is a well known fact that the taxes on building materials like steel and cement and the high level of stamp duties on property purchase raise the total cost of housing units. In a conference on real estate sector, Kumar Gera, the Chairman of CREDAI( Confederation of Real Estate Developers' Association of India) opined that, the taxes and duties related to the housing sector should be lowered in order to make housing more affordable.
In this respect, Kamal Nath also revealed his view that, in the present situation, when Indian Economy is growing at a fast pace, creation of international standard infrastructure has become a necessity. Moreover, for the attainment and sustenance of the growth rate, that was projected in the last five year plan, incentives should be given to the Indian Housing Sector.
However, this is just a speculation that levies and duties relating to the housing sector are going to decrease in the budget 2008-09, because the Indian Trade Minister has not yet disclosed what his ministry is actually going to suggest the Finance Ministry for the upcoming budget.
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