Post-Budget Real Estate Trends: Who Gains and Who Losses?
The Budget 2024 introduces significant tax reforms that will impact real estate transactions and growth in the current financial year. Here's what it means for buyers and sellers.
Real EstateBudget 2024Tax ReformsAffordable HousingHome LoansReal Estate NewsJul 27, 2024
One of the key benefits for real estate buyers is the increased disposable income due to the simplified tax system and increased tax brackets for mid-range taxpayers. This could lead to more investment in real estate and potentially lower interest rates on home loans. The government has also prioritized affordable housing, allocating Rs 10 lakh crore for the Pradhan Mantri Awas Yojana (PMAY) Urban 2.0 to cater to the housing requirements of 1 crore urban poor and middle-class families in the next five years.
Additionally, the finance minister has urged state governments to reduce stamp duty for all and lower it for women buyers, which will be a big relief for home buyers who pay higher stamp duty. The government has also earmarked Rs 4,000 crore for the credit-linked subsidy scheme within PMAY-U to enable accessible loans for economically disadvantaged sections, low-income groups, and middle-income groups.
However, the removal of the indexation benefit for the sale of non-financial assets, like real estate, could result in a greater effective tax burden on long-term capital gains (LTCG) for property owners, particularly those with properties held for more than five years. The elimination of the indexation benefit, despite the reduced LTCG rate, might increase the tax burden on real estate transactions.
Experts suggest that the impact of this adjustment will vary depending on how long you have owned the asset. It is now essential to take into account the new taxation when considering real estate investment as a long-term asset.
The Budget 2024 provides a comprehensive approach to increase more supply for affordable housing and address the housing needs of the urban poor and middle-class families. While real estate may see higher growth due to increase in consumption, the tax burden may make it less lucrative for long-term investment.
Frequently Asked Questions
What is the impact of Budget 2024 on real estate transactions?
The Budget 2024 introduces significant tax reforms that will impact real estate transactions and growth in the current financial year.
How will the simplified tax system benefit real estate buyers?
The simplified tax system and increased tax brackets for mid-range taxpayers will lead to more disposable income, which could lead to more investment in real estate.
What is the significance of PMAY 2.0 in Budget 2024?
PMAY 2.0 is a priority in Budget 2024, with Rs 10 lakh crore allocated to cater to the housing requirements of 1 crore urban poor and middle-class families in the next five years.
How will the removal of indexation benefit affect property owners?
The removal of the indexation benefit could result in a greater effective tax burden on long-term capital gains (LTCG) for property owners, particularly those with properties held for more than five years.
What is the exemption for rollover benefits in Budget 2024?
Rollover benefits still continue as capital gains up to Rs 10 crore, if reinvested, will not attract any capital gains tax.
Related News Articles
Crackdown on Black Money: Surat Police Seize ₹75 Lakh in Demonetised Notes, Arrest 4 Linked to Real Estate Sector
In a significant crackdown on black money, Surat Police have seized demonetised notes worth ₹75 lakh and arrested four individuals connected to the real estate sector.
Bollywood Star Ronit Roy Buys Luxury Apartment in Mumbai's Versova for ₹18.94 Crore
Mumbai real estate: Ronit Roy and wife Neelam Roy purchase a 4,258 sq ft apartment in Versova area of Mumbai for ₹18.94 crore, according to property registration documents.
Rise of Upper Kharghar and Panvel as Prime Real Estate Destinations
Discover the growth potential of Upper Kharghar and Panvel, two areas in the Mumbai Metropolitan Region that offer a range of housing options, robust infrastructure, and promising returns on investment.
Luxury Living Redefined: How Fashion Designers Are Revolutionizing High-End Realty
Read more news on luxury realty, fashion designers, and real estate market trends
CIDCO Unveils 902-Unit Housing Scheme on Krishna Janmashtami 2024
CIDCO launches new housing scheme in Navi Mumbai, offering 902 units across multiple housing complexes.
The Great Return: How Office Mandates Are Fueling Housing Price Hikes in These 10 Cities
As companies call employees back to the office, housing prices are rising in cities with limited inventory. The Federal Reserve's interest rate cut is expected to lower mortgage rates, increasing purchasing power for homebuyers.