Budget 2023: Real estate expectations from FM Nirmala Sitharaman

The residential sector is seeing a strong bounce back post covid pandemic. The year 2022 was one of the most eventful years for Indian real estate with sales recovery observed in many of the major markets in the country. Both residential sales and commercial leasing picked up stemmed from healthy economic growth and a rise in demand. The sector is looking at a robust housing demand revival in 2023, it also expects the Union Budget 2022 to play a supportive and enabling role. Few key relaxations in taxes, a reduction in stamp duty to boost the industry are some of the expectations from Finance Minister Nirmala Sitharaman by the industry.

Gurmit Singh Arora, National President, Indian Plumbing Association said a reduction in stamp duty is required. The burden was placed on the industry following the implementation of GST, and it is extremely difficult for builders to pass it on to consumers. It is possible to achieve this by granting waivers rather than incentivizing it. 

Indian real estate stands on a strong footing with a hike of 50% in sales transactions in 2022, compared to the previous calendar year. Nakul Mathur, MD, Avanta India said the positive sentiments will continue in 2023 backed by a healthy economic outlook, expansion in the job market, and a rise in per capita income. 

“Steps such as reducing GST rates on raw materials such as cement & steel, offering better credit for developers, and single window clearance can immensely help the overall sector,” said Nakul Mathur.

According to Suren Goyal, Partner, RPS Group the government should step up and take proactive steps to reduce lending rates. If directly reducing the rates is not feasible then it should at least try other means such as offering incentives to first-time home buyers and rendering more lucrative deductions in income tax returns.

“Proactive steps such as increasing the limit of home loan interest deduction on income tax returns and reducing capital gain tax can give a further push to consumer spending and hence will be beneficial to the sector in the longer run. Meanwhile, GOI should also try to create new avenues of lending for the developer fraternity,” said Ankit Goel, Director, Goel Ganga Developments.

According to Hari Kishan Movva, Senior Vice President, SILA (Real Estate), the 2023 budget the industry hopes will offer some positives to help strengthen the real estate market. 

Given that the inflationary environment is the key risk for real estate, we are also expecting a leeway in terms of reduction in GST rates for key raw materials and re-introduction of input tax credit which would help developers tide over inflationary pressures, he added.

Mrinaal Mittal, Director, Blackteak Realty said that eeal estate industry is very sanguine about the 2023 budget and hopes to continue the strong momentum of the previous year. 

As for the LTCG, the tax rate should be decreased with relaxation on the time limit on construction of the new property, he added.

How many of these expectations are met, for that stay tuned on 1 February 2023 when Finance Minister Nirmala Sitharaman will present her budget.