Tax cuts possible for Indian real estate developers

October 3, 2008 by OPPE News

A possible swing towards more affordable new homes for sale in India is being bolstered by government hints of tax cuts for related building projects.

The Financial Express reports commerce and industry minister Kamal Nath said the government would look at duty breaks for constructors and materials.

More expensive sections of the Indian real estate market are currently seeing a serious slump, although demand for cheaper properties remains high.

A reverse in the construction of pricier new homes is expected to prompt some developers to start concentrating on mid-level and affordable housing schemes.

Quoted by the Express, Mr Nath said:

“Affordable housing is important. We need low-cost housing. I favour what stimulates the sector.

“The government has to look at it [reducing high duties on construction and building materials].”

The paper also said Mr Nath added the Indian real estate industry has seen annual growth of 13 to 14 per cent, with international players already involved while others are showing interest.

Analysis and information firm Ernst and Young has said more affordable housing would be behind a renewed boom in Indian property over the next few years.