India's Real Estate Sector Pins Hopes on Budget Reforms
The real estate sector in India is eagerly awaiting the upcoming budget, hoping for progressive reforms to boost growth and demand.
Real EstateBudget ReformsIndiaHousingInfrastructure DevelopmentReal Estate MumbaiJun 22, 2024
To sustain this growth, the government must outline a strategic roadmap for the next five years, which includes measures to boost capital investments and attract higher foreign direct investment (FDI) inflows into India. Within the real estate domain, maintaining demand for housing is critical, given its ripple effect on more than 200 supporting sectors. One long-awaited measure is the introduction of a separate deduction for home loan principal repayment, coupled with an increase in tax exemptions on home loan interest from Rs 2 lakh to Rs 5 lakh. This initiative would alleviate the impact of rising home loan EMIs and offer substantial relief to home buyers. Another key expectation is the grant of industry status to the housing sector, which would help to revive affordable housing that has seen a decline post-pandemic.
Anuj Puri, Chairman of ANAROCK Group, highlighted the real estate sector’s expectations from the upcoming Union Budget 2024-25, emphasizing the industry’s hope for tax reliefs. He also proposed reinstating the ‘100% Tax Holiday’ benefit for developers under section 80-IBA of the Finance Act, 2016, to incentivize affordable housing construction. Badal Yagnik, Chief Executive Officer of Colliers India, expressed optimism about the upcoming budget, emphasizing the need for a strategic plan that caters to the evolving requirements of stakeholders, including end-users, developers, and investors in the real estate community. Key areas such as housing, infrastructure development, sustainability, and digitization are expected to be central themes of the budget, supporting long-term growth across different real estate segments.
Frequently Asked Questions
What is the expected GDP growth rate according to the Reserve Bank of India?
The Reserve Bank of India has projected a GDP growth rate exceeding 7%.
What is the long-awaited measure in the real estate sector?
The long-awaited measure is the introduction of a separate deduction for home loan principal repayment, coupled with an increase in tax exemptions on home loan interest from Rs 2 lakh to Rs 5 lakh.
What is the current state of affordable housing in India?
There has been a significant drop in the share of affordable housing sales and supply after COVID-19.
What benefit is being proposed for developers to incentivize affordable housing construction?
The ‘100% Tax Holiday’ benefit for developers under section 80-IBA of the Finance Act, 2016, is being proposed.
What are the key areas expected to be central themes of the budget?
Key areas such as housing, infrastructure development, sustainability, and digitization are expected to be central themes of the budget.
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