Real estate and senior living sector


Budget 2022 is an opportunity for the government to ease the burden on a demographic that has been most affected by the double whammy of decreasing interest rates, increasing retail inflation and medical expenses inflation over the past couple of years – retirees and senior citizens.

With a fixed income dependent on returns from savings made during their working life, senior citizens need the government’s intervention so banks can provide a higher rate of return on their deposits and the income tax slabs and tax levels are revised to leave more money at their disposal.

Improvement in the terms of reverse mortgage is another area where government policy can help unlock the value in an asset such that senior citizens can enjoy the benefits of the same in their lifetime. An amendment in the rules that allows the owner to continue to live in the home that (s)he has put on mortgage and an increase in the percentage of home value that can be provided as a loan would go a long way in making reverse mortgage another option for senior citizens to monetise their investment.

When living on their own, seniors have to depend on individuals from the unorganised labour sector for most of their daily chores – home cleaning, maintenance, gardening, security, driver etc. Senior living communities help move the labour force into the organised sector. This results in the employees getting additional social benefits viz. Provident Fund and ESIC. Further, seniors are able to enjoy a worry-free daily life. Waiver or reduction of the 18% Goods and Services Tax for services in a senior living community would be welcomed by both the residents and the industry.

There is also a need to review the definition of “affordable housing” such that it reflects the disparity in land prices across the country. No change is required in the size stipulation of 60 sq. mtr. (major cities) and 90 sq. mtr. (non-metropolitan cities). However the price limit of ₹45 lakh is not viable in several metropolitan cities of India.

(Mohit Nirula, CEO, Columbia Pacific Communities)

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