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Business News/ Budget / Budget Expectations/  Budget 2024-25: Three key expectations for the real estate sector
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Budget 2024-25: Three key expectations for the real estate sector

Industry experts believe that to boost the real estate industry, the government should consider giving it industry status, and provide single window clearance, tax breaks, and GST rationalization in the budget

Budget 2024-25: Industry experts believe that the government should focus on the affordable housing segment in the upcoming budget to revive the sector.Premium
Budget 2024-25: Industry experts believe that the government should focus on the affordable housing segment in the upcoming budget to revive the sector.

The Indian real estate peaked in 2023. Industry experts believe that the bullish sentiments in the market will further continue in 2024 backed by a healthy macroeconomic outlook, stable lending rates, and an upbeat job market. Finance Minister Nirmala Sitharaman presents the Interim Union Budget 2024 on February 1

So let's look at some of the major expectations they expect for Budget 2024 from various industry experts.

1)Affordable housing segment

The government should focus on the affordable housing segment in the upcoming budget to revive the sector and bridge the housing gap through policy impetus, tax breaks, and fiscal support.

“This budget the govt. should take a closer look at the affordable housing segment. A sunrise segment of the realty market, the category suffered a decline in sales during the pandemic. Currently, it comprises just 20% of the total housing sales, a marked difference from pre-pandemic days, when it accounted for 40% of sales. Through carefully curated policy impetus, tax breaks, and fiscal support, governing agencies need to help the sector revive, as it will be instrumental in bridging the widening housing gap," said Jetaish Gupta, the co-founder and director of Adore Group.

2) Industry status in real estate

To boost the real estate industry, the government should consider giving it industry status, and provide single window clearance, tax breaks, and GST rationalization in the budget. These measures will have positive impacts on other related industries as well.

“Indian real estate has grown steadily and the government needs to offer policy impetus and support to further give a buying boost to the industry. The sector plays a critical role in the economy and contributes to around 8% of the GDP. It is also the second biggest employment generator after the agriculture industry and more than 200 ancillary industries rely on it. Hence the government should take proactive steps to boost the demand, rationalize the cost, and reduce the regulatory bottlenecks. In the coming budget, the governing agencies should look into giving real estate the industry status which is long due alongside mulling over single window clearance, tax breaks, and GST rationalization. This would not just be beneficial for the realty industry but the positive impacts will cascade into other related industries," said LC Mittal, Director, of Motia Group.

3) Increase home loan interest rate rebate

To stimulate the housing market, experts believe it's crucial to increase the Income Tax Act Section 24's home loan interest rate rebate from 2 lakh to at least  5 lakh. “This will attract genuine homebuyers and boost the demand. Likewise, it should look into other parameters such as reducing the repo rates, offering tax holidays to developers, and finding other alternative sources of project funding," said Anurag Goel, Director, of Goel Ganga Developments.

“This adjustment could particularly benefit budget homes, facing a 20% decline in sales in 2023 due to the pandemic," said Hari Kishan Movva, Senior Vice President, SILA.

Reviving expired incentives, like tax breaks, is imperative for affordable housing. Modify eligibility criteria, considering the Ministry's definition based on income, property size, and price. Adjust the qualifying cost for city properties; for instance, raise the budget to INR 85 lakh for Mumbai. This ensures broader accessibility and utilization of government subsidies and reduced GST rates, added Hari Kishan Movva.

Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

 

 

 

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ABOUT THE AUTHOR
Sangeeta Ojha
A business media enthusiast. Writes on personal finance, business and banking.
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Published: 09 Jan 2024, 02:55 PM IST
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