Budget for the financial year 2019-20 has introduced many new novelties targeted at boosting affordable housing. New rules regarding tenancy have been formed which aim at improving the real estate sector of the country.
With reforms and several schemes pouring in, estimated growth of 20 Billion is expected by 2020.
The reforms aimed at easing the financial burden of the middle class, especially those living in metropolitan areas; have kept both land-owners as well as tenants in mind. Its major pointers of revision are –
Lowering of security deposits: Previously, the conventional amount for security deposits used to be the equivalent of 9-10 months’ rent. With the present reforms, that amount has come down to rent of not more than 2 months.
Lowering of rental prices: New model tenancy laws have reduced the burden of tenants with strict laws in effect to ensure the prevention of inflation in rental prices.
Transfer of agreement: This introduction ensures affordable housing remains with a family in case a tenant passes away. While previously, an agreement would become null and void with the demise of the original tenant, this ensures the agreement passes on to a family member.
Compensation and fines: This introduction favors landlords. The law secures damage compensation for landowners before completion of contract tenor. In an event of payment default or irregular clearance, heavy fines have been levied.
On the other hand, the PMAY scheme has made home loans very affordable in India. The scheme has successfully built 1.53 Crore houses over the country and currently aims at providing 1.45 Crore families with brick and mortar housing.
Reference Link: Budget 2019: Rental & Affordable Housing Schemes to Get Boosted
