 "Interim Budget 2024: What does the real estate sector expect from Centre?")
Finance Minister Nirmala Sitharaman will present the interim budget 2024 on February 1. This will be FM Sitharaman’s sixth budget. As general elections are scheduled to take place in India later this year, this budget will be a “vote-on-account”.
A full-fledged budget will be presented after the new cabinet is elected after the elections.
Interim Budget 2024: Here’s what the real estate sector expects
Anuj Puri, Chairman, Anarock Group:
It is necessary to increase Section 24 of the Income Tax Act's INR 2 lakh tax rebate on home loan interest rates to at least INR 5 lakh. Doing so could stimulate a more robust market for housing, particularly in the budget homes segment, which has seen a decline in demand since the pandemic.
Addressing the land shortage for this vital housing segment is also necessary. Certain lands that are owned by Indian Railways, Port Trusts, Department of Heavy Industries, etc., may be released by the corresponding government agencies. When this land is released at a low cost specifically for affordable housing, it will also significantly lower real estate prices overall.
Pritam Chivukula, Co-Founder and Director, Tridhaatu Realty and Vice President, CREDAI-MCHI
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With property prices in metro cities skyrocketing, the industry advocates for a revision of the cap in the credit link subsidy scheme. Raising the limit from Rs 45 lakh to Rs 1 crore for metro city home buyers will significantly benefit the affordable housing segment, making homes more accessible.
Himanshu Jain, Vice President (Sales, Marketing & CRM), Satellite Developers Private Limited (SDPL)
Among the most pressing agendas is the mission to make affordable housing universally accessible, a priority echoed in the expectations for the upcoming Union budget.
The industry is appealing for a robust government package aimed at alleviating the severe demand shortage. Their proposal includes relief measures for homebuyers, particularly in the pricing domain, to stimulate the market.
Rohan Khatau, Director, CCI Projects Private Limited
The sector's long-standing request for recognition as an “Industry” remains a focal point. This status could enable the sector to attract equity investments, restructure debts, and secure loans at more favorable interest rates.
There is a strong emphasis on increasing investments in both green infrastructure, like renewable energy, and traditional infrastructure, such as roads, railways, and ports. These investments are seen as crucial for the growth of both the real estate sector and the overall economy.
Aakash Patel, Director, Atul Projects India Pvt. Ltd.
The Indian government's strategic reforms, aimed at revitalizing the economy, have infused the market with liquidity, showing promising long-term economic benefits. These measures have painted an optimistic picture of India's economic prospects in the years ahead.
However, the expiry of several incentives for developers and consumers in the past one to two years has highlighted the need for renewed and extended benefits. Critical measures, such as tax breaks for affordable housing development and acquisition, are seen as crucial for the sector's continued vitality.
Samyak Jain, Director, Siddha Group
A key focus is on enhancing the access of first-time homebuyers to affordable housing, particularly in metropolitan cities. The industry is hopeful for an upward revision of the cap in the credit link subsidy scheme, along with the introduction of tax benefits for first-time homebuyers. Such measures are seen as pivotal in sustaining the sector's momentum.
The government's efforts in promoting affordable housing have been acknowledged and appreciated. However, there is a need for further enhancements.
Sandeep Runwal, President, NAREDCO Maharashtra
A major focal point for the government continues to be affordable housing. We suggest an increase in the cap for interest rate deduction under section 24(b) from Rs 2 lakh to Rs 5 lakh per annum. Additionally, there's a call to redefine the definition of affordable housing, proposing an increase in the cap from Rs 45 lakh to Rs 1 crore, particularly in metro cities. This change is expected to significantly boost both affordable and mid-segment housing.
There's a call for an increase in the SWAMIH stress fund and the creation of a second tranche with a corpus of Rs 50,000, aimed at completing stalled realty projects and ensuring adequate liquidity.
Shishir Baijal, Chairman and Managing Director, Knight Frank India
In addition to supporting homebuyers, the budget can also play a part in incentivizing rental housing for the low-income segment for many of whom, acquiring a home is simply not an option. There are houses in the sub-50 lakh ticket size that have been acquired as an investment but remain unoccupied as owners do not find it viable to rent out due to the low prevailing yields.
The budget could introduce a 100 per cent exemption for rental income up to Rs 3 lakh for houses costing up to Rs 50 lakh. This would incentivize investors to rent out properties and augment the supply of rental accommodation in the segment which is the most impacted by the housing shortage.
Saurabh Garg, Co-founder and Chief Business Officer, NoBroker.com
It would be great if the budget addresses certain areas which in turn can boost more investment in the real estate sector. There is a pressing need for revision in the long-term capital gains tax on property. Reducing it from the existing 20 per cent to 10 per cent can foster increased investment in the property market. Furthermore, it would be good if the budget sanctions a simpler structure in order to streamline processes and enhance the attractiveness of REITs as an investment avenue.