The real estate sector in Chennai is witnessing a significant boom in recent years, with a flurry of government initiatives backing it. Factors such as improving transportation infrastructure, favorable tax policies, and increasing foreign investments are contributing to a conducive environment for real estate investment in Chennai. However, it is crucial to understand the various government initiatives that have been implemented to support the growth of this sector in the city. This blog aims to shed light on these initiatives and their impact on the real estate sector in Chennai.

Smart City Mission

The government launched the Smart City Mission in 2015 to promote urban development and create sustainable, livable cities. Chennai was selected as one of the 100 smart cities under this mission, and various infrastructure projects were initiated to make Chennai a more livable city. The development of elevated expressways, the Metro Rail project, connectivity projects, and better water management systems have positively impacted the real estate sector in the city. The Smart City Mission has also made Chennai a more attractive investment destination for domestic and foreign investors.

Pradhan Mantri Awas Yojana (PMAY):

PMAY is a government scheme aimed at providing affordable housing to all Indians by 2022. Under this scheme, the government provides subsidies and incentives to developers to build affordable housing units. In Chennai, PMAY has facilitated the construction of affordable housing in areas such as Avadi, Perumbakkam, and flats in OMR ECR link road. Developers who build affordable housing units can avail of various benefits such as an interest subsidy of up to 6.5%, tax incentives, and fast-tracked approvals.

Real Estate (Regulation and Development) Act, 2016 (RERA)

RERA is a landmark legislation aimed at promoting transparency, efficiency, and accountability in the real estate sector. This Act has made it mandatory for developers to register their projects and disclose all relevant information such as the project timeline, and the status of approvals. This Act has empowered homebuyers and has ensured that they are not misled or cheated by developers. RERA has created a level playing field for developers and has helped create a favorable investment climate in Chennai.

Goods and Services Tax (GST)

GST is a unified tax system that replaced multiple indirect taxes such as sales tax, service tax, and value-added tax. This tax regime has streamlined the tax system and has made it easier for investors to invest in the real estate sector. One of the key benefits of GST is the input tax credit, which allows developers to claim a credit for the taxes paid on the raw materials used to construct the property. This has reduced the overall cost of construction and has made housing more affordable.

Foreign Direct Investment (FDI)

The government has been actively promoting FDI in the real estate sector in India. In Chennai, FDI has contributed significantly to the growth of the sector. With favorable policies, such as 100% FDI in construction development projects and the removal of restrictions on minimum area requirements, foreign investors are showing interest in the Chennai real estate sector. This has led to an increase in the quality of construction, the timely completion of projects, and a boost in the overall demand for properties.

Conclusion

The government initiatives mentioned above have created a favorable environment for real estate investment in Chennai. The Smart City Mission, PMAY, RERA, GST, and FDI policies have led to the development of necessary infrastructure, affordable housing, transparency, accountability, and a better investment climate. Investors can leverage on these policies and invest confidently in the Chennai real estate market. Common people can look forward to improving infrastructure and the availability of affordable housing. With Chennai swiftly moving into a smart city, investors, and the common mass alike can look forward to investing in an upcoming market.