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
Rohan Builders Achieves Unparalleled Excellence with 14 Consecutive Years of CRISIL DA2+ Grading
Rohan Builders continues to maintain its prestigious DA2+ Developer Grading from CRISIL, demonstrating its commitment to excellence in financial and operational parameters.
Sebi Chief Remains Tight-Lipped on Real Estate Investment Trusts
REITs comprise a portfolio of commercial real estate assets, most of which are already leased out.
PGA of America Launches State-of-the-Art Golf Courses in Mumbai, Navi Mumbai, and Hyderabad
AIVOT Golf & Sports Management collaborates with Shapoorji Pallonji Real Estate, Stonecraft Group, and Tvastar Golf to introduce PGA of America-branded golf courses in Mumbai, Navi Mumbai, and Hyderabad, setting a new standard for golf excellence in India
Raymond Expands Real Estate Footprint with Mahim Project Deal
Raymond, in a strategic move, has signed a Joint Development Agreement for a prestigious residential project in the prime location of Mahim West, Mumbai.
Amrita Singh, Zaheer Khan Among Celebrities Investing in Mumbai's Luxury Real Estate
Amrita Singh and Zaheer Khan are among the latest celebrities making significant investments in Mumbai's luxury real estate market. Discover the trends and insights of these high-profile investments.
SP Group Raises $3.3 Billion from Five Funds to Boost Real Estate and Construction Projects
SP Group secures a significant $3.3 billion investment from five prominent funds, aimed at refinancing and expanding its real estate and construction projects. This strategic move will help the company solidify its position in the market and drive sustain