Boosting India's Housing Market: Budget 2024 Expectations from Real Estate Sector
The real estate sector is anticipating measures to revitalize the affordable housing segment, with expectations of incentives and support measures in Budget 2024.
Union Budget 2024Real Estate SectorAffordable HousingPremium HomesTax IncentivesReal EstateJul 12, 2024
The Covid-19 pandemic has posed significant challenges to the affordable housing segment, and the sector is expected to receive substantial attention during Prime Minister Narendra Modi's third term. In the 2024-25 Interim Budget, FM Sitharaman announced a significant initiative to add 2 crore more houses to the flagship scheme, Pradhan Mantri Awas Yojana – Urban (PMAY-U).
However, the real estate industry is currently experiencing a noticeable contrast between the premium and affordable housing sectors. While premium housing units are in high demand, the affordable housing segment is struggling to generate demand. According to a report by Anarock Research, the sales share of affordable housing has declined significantly post-pandemic, from 38% in 2019 to 26% in 2022, and further to 20% in the first quarter of 2024.
CA (Dr.) Suresh Surana suggests that the government should revise tax incentives such as Section 80C, Section 24(b), Capital gains taxation, and home loan tax relief under the New Tax Regime to boost the real estate market. He also emphasized the importance of supporting both the affordable and premium housing segments, as they have different benefits for the economy and society.
To stimulate growth in the housing sector, the government can consider implementing a rebate in income tax rates, providing supplementary benefits on home loans, and introducing initiatives to incentivize developers to increase the construction of residences. Additionally, the government may prioritize affordable housing to address social needs and ensure inclusive growth, while also supporting the premium sector to yield economic benefits through increased revenue, job creation, and infrastructure development.
Some potential incentives that can bring relief to both segments include increased affordability, boosting supply, and social impact for affordable housing, and encouraging investment, economic growth, and competitiveness for premium homes.
The government is also expected to increase the allocation and introduce the second tranche of the SWAMIH fund in the 2024 budget, which aims to facilitate the completion of stalled projects by ensuring adequate liquidity and addressing the affordable and mid-income housing crisis.
Overall, the real estate sector is expecting a balancing act from the government in Budget 2024, with measures that can stimulate demand in both the affordable and premium housing segments and contribute to the overall growth and development of the sector.
Frequently Asked Questions
What is the expected focus of the Union Budget 2024 for the real estate sector?
The expected focus is on revitalizing the affordable housing segment and introducing measures to stimulate demand in both the affordable and premium housing segments.
What is the current sales share of affordable housing in the real estate market?
According to a report by Anarock Research, the sales share of affordable housing has declined to around 20% in the first quarter of 2024.
What are some potential tax incentives that can benefit the real estate sector?
Some potential tax incentives include revising Section 80C, Section 24(b), Capital gains taxation, and home loan tax relief under the New Tax Regime.
What is the significance of supporting both affordable and premium housing segments?
Supporting both segments can address social needs, ensure inclusive growth, and yield economic benefits through increased revenue, job creation, and infrastructure development.
What is the expected outcome of the SWAMIH fund in the 2024 budget?
The expected outcome is to facilitate the completion of stalled projects by ensuring adequate liquidity and addressing the affordable and mid-income housing crisis.
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