BUDGET 2024: INCREASED
The stakeholders of the Real Estate Sector have proposed to the government to increase the qualifying cost of the Affordable Real Estate. They have also proposed to release the lands owned by the Government at lesser prices. These demands from the stakeholders of the Real Estate Sector comply with their objective of inclusive growth.
The Real Estate Sector is optimistic about the Union Budget 2024:
Anticipating a boost for affordable housing amidst inflationary challenges. Industry experts look forward to Finance Minister Nirmala Sitharaman’s announcement on February 1, with expectations of supportive measures, especially an increase in the deduction for home loans. The Real Estate Sector holds high expectations from the upcoming budget to address current challenges and promote growth in affordable housing.
Nirmala Sitharaman, India's Finance Minister, has proposed an 11.1% increase in capital investment for the fiscal year 2024-25, totaling Rs 11,11,111 crore, which is 3.4% of the country's GDP. This budget is seen as a statement of the Modi government's vision for a third term, indicating an assumption that they expect to be re-elected.
In the realm of India’s real estate sector:
Recent proposals indicate a strategic alignment with inclusive growth objectives. The proposition to increase the qualifying cost for affordable properties and make government-owned lands available at reduced rates is poised to play a pivotal role in fostering this alignment. Avneesh Sood, Director of Eros Group, emphasizes the significance of these measures in promoting inclusive growth.
One noteworthy proposal aims to elevate the qualifying cost for affordable properties, a move that could reshape the landscape of affordable housing. Simultaneously, the plan to release Government-owned lands at reduced rates echoes the commitment to making housing more accessible and affordable for a broader demographic. Avneesh Sood underscores how these proposals align with the objectives of inclusive growth within the real estate sector.
Crucially, There is a concerted effort to breathe new life into the budget housing segment. The proposal to raise the tax deduction limit on home loans from INR 2 lakh to INR 5 lakh has garnered attention as a potential catalyst for rejuvenating this segment. Avneesh Sood notes that this initiative comes at a crucial juncture, particularly in light of recent interest rate hikes that have impacted the affordability of housing loans.
Anuj Puri, Chairman of Anarock Group, echoes this sentiment, emphasizing the potential of increasing the rebate to at least INR 5 lakh. This move, he believes, could inject renewed vigor into the housing market, especially within the budget homes segment. This particular sector has witnessed a dip in demand since the onset of the pandemic. The proposed tax deduction increase is seen as a strategic measure to stimulate a more robust market for budget homes.
Looking ahead to 2024:
Anuj Puri maintains a positive outlook for the real estate sector. However, he acknowledges that the outcome of the upcoming general elections will wield significant influence over the trajectory of demand and growth in residential real estate. As the industry navigates the dynamics of evolving market conditions, the need to reinvigorate interest stimulants becomes imperative.
Puri highlights that several interest stimulants provided to developers and consumers in the real estate market over the past years have expired in the last one to two years. Now, he emphasizes the importance of reviving and extending significant benefits, particularly tax breaks. This approach is deemed essential to incentivize developers to undertake more affordable housing projects and facilitate prospective buyers in acquiring such homes.
The proposals within the real estate sector signify a strategic push toward inclusive growth. The focus on affordable properties, coupled with measures to ease land acquisition, underscores a commitment to making homeownership more accessible. The proposal to enhance tax deductions on home loans emerges as a key initiative to breathe life into the budget housing segment. As the industry anticipates the outcomes of the upcoming general elections, the need for sustained and strategic interventions, such as tax breaks, remains imperative for steering the real estate sector towards a path of sustained growth and inclusivity.
NAREDCO National President G Hari Babu urged for MSME status for small builders in the Real Estate Sector. A representation has been submitted to the finance ministry. Additionally, a scheme for individuals earning up to Rs. 40,000/month is proposed. The real estate developers are also pushing for a GST rate reduction on construction materials.
