Boosting Affordable Housing: Real Estate Developers Pitch for Budget Reforms
Real estate developers are urging the finance minister to implement key reforms in the upcoming budget to revive the affordable housing segment, including reinstating the credit-linked subsidy scheme and revising the definition of affordable housing in la
Real EstateAffordable HousingBudget ReformsMumbaiPropertiesReal Estate MumbaiJul 18, 2024
According to Anarock Property Consultants, the share of affordable housing in residential sales has dropped from 38% in 2019 to 20% in 2023. Sanjay Dutt, managing director and CEO at Tata Realty & Infrastructure, emphasized the necessity of reinstating incentives like the CLSS under the Pradhan Mantri Awas Yojana (PMAY) and providing 100% tax holiday benefits for developers to revive this segment.
Revising the definition of affordable housing to reflect city-specific dynamics is also crucial. In cities like Mumbai, where affordability thresholds are insufficient, adjusting pricing benchmarks would ensure broader access to benefits such as lower GST rates and government subsidies. Dutt suggested that in Mumbai, properties valued between INR 50 lakh and INR 75 lakh should be considered for affordable housing.
Niranjan Hiranandani, managing director at Hiranandani Group, proposed an even higher value cap of INR 1 crore for metro cities that have experienced muted demand-supply scenarios. He also advocated for the removal of hindrances related to the 80-90% floor area ratio (FAR) and the payment of tax on profits via alternate minimum tax (AMT) or minimum alternate tax (MAT).
Industry experts also stress the need for an increase in the income tax deduction for home loan interest from the current INR 2 lakh to INR 5 lakh and a streamlined approval process across the country. These measures are essential to revitalizing the affordable housing segment, ensuring it can meet the needs of a broader population and contribute to the overall growth of the real estate market.
Information
Tata Realty & Infrastructure is a leading real estate developer in India, known for its premium residential and commercial projects.
Hiranandani Group is a well-established real estate company in India, with a strong presence in Mumbai and other major cities.
Signature Global (India) is a reputed real estate developer in India, specializing in affordable housing projects.
Anarock Property Consultants is a leading real estate consultancy firm in India, providing expert advisory services to developers, investors, and homebuyers.
Frequently Asked Questions
What is the current share of affordable housing in residential sales?
According to Anarock Property Consultants, the share of affordable housing in residential sales has dropped from 38% in 2019 to 20% in 2023.
What is the proposed value cap for affordable housing in metro cities?
Niranjan Hiranandani, managing director at Hiranandani Group, proposed an even higher value cap of INR 1 crore for metro cities that have experienced muted demand-supply scenarios.
What is the current income tax deduction for home loan interest?
The current income tax deduction for home loan interest is INR 2 lakh, which industry experts are advocating to increase to INR 5 lakh.
What is the definition of affordable housing currently?
Currently, affordable housing is defined as a flat or house with a carpet area up to 90 square metres in metros and towns, and 60 square metres in major metros, or valued up to INR 45 lakh, or both.
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