“Affordable Rental Housing Complex” is included in the Harmonized Master List of Infrastructure Sub-sectors by insertion of a new item in the category of ‘Social and Commercial Infrastructure’, with a footnote defining Affordable Rental Housing Complex,” the Board said in a notification Friday.
The change means that foreign investors can directly or through vehicles such as alternate investment funds (AIFs) or infrastructure investment trusts (In-vITS) invest in rental housing projects in the country, under the sub-sector of social infrastructure. Income from this category will be exempt from taxes.
The move is likely to give a boost to the affordable rental housing segment in India, which has taken a beating amid the Covid pandemic, as per experts.
The Board has defined affordable rental housing complex as a project to be used for rental purpose only for urban migrant or poor, economically weaker sections or lower income group, for a minimum period of 25 years with basic civic infrastructure facilities such as water, sanitation, sewerage, road, electricity along with necessary social and commercial infrastructure and the initial rent fixed by local authority based on local survey of surrounding area wherein the project is situated.
The project should have at least 40 dwelling units of double room or single room or equivalent dormitory units or a mix of all three in any ratio but not more than one third of the total built up area under double bedrooms units. Space size for each has also been specified.