Two bills on housing in this session

NEW DELHI, APRIL 2: The Union Government will introduce two bills on housing -- one on the foreclosure norms and the other on a model Ren...

NEW DELHI, APRIL 2: The Union Government will introduce two bills on housing 8212; one on the foreclosure norms and the other on a model Rent Control Act 8212; in the current session of Parliament, Ram Jethmalani, Union Minister for Urban Affairs and Employment, said here on Friday.

The bill on foreclosure will enable securitisation of secondary mortgage of houses and give a boost to the housing activity in the country. The minister said that all details of the foreclosure law is being finalised in consultation with the concerned authorities. In order to enable the securitisation of secondary mortgage, the Urban Affairs Ministry has asked the state governments to reduce stamp duty.

The model Rent Control Act will be formulated by the Urban Affairs Ministry and circulated among the states so that they can enact it.

The Minister said that the Government is contemplating extending the time limit for completion of housing projects to 2010. In the Budget, income from housing project has been allowed 100 per cent tax exemption under Section 80 1A. But the condition for availing this was that the project should be completed on or before March 31, 2001.

Jethmalani also said that the Government is considering extending the tax holiday for residential unit of 1500 square feet to locations in Mumbai and Delhi. Regarding the budgetary provision of increasing the depreciation rate for investment in housing from 20 per cent to 40 per cent on new dwelling units purchased by the corporate sector for its employees, the minister said that he will consider broadbasing this facility to include non-corporates as well. The Government, he added, is also considering according deemed export status to the housing sector.

Jethmalani said that he would personally meet representatives of state governments to make them understand the need to repeal the Urban Land Ceiling Act ULCRA. 8220;Some states like Maharashtra, Karnataka and Gujarat are in the process of doing so,8221; he added.

The proposal to allow foreign direct investment is under consideration of the Union Cabinet, he said adding that his ministry8217;s condition to the proposal is only that a three-year lock-in-period be allowed in this respect.

Story continues below this ad

However, Jethmalani did not agree with the demand of giving industry status to the housing sector as it will bring many difficulties to the sector.

Jethmalani said that despite 100 per cent NRI investment allowed in the housing sector since 1993, only Rs 550 crore have come so far as against the overall requirement of Rs 4,00,000 crore in the sector.