Budget 2024: Coworking, senior living sectors anticipate major policy reforms

With the Union budget approaching, real estate experts say the government must focus on the coworking sector, integral to the flexible workspace landscape ---- that will drive innovation and entrepreneurship across the nation.

Despite the positive outlook for the country's real estate sector, several underlying problems such as high interest rates and reduced affordability continue to pose a challenge for homebuyers and developers.

With the Union budget approaching, real estate mavens say the government must focus on the coworking sector, integral to the flexible workspace landscape, arguing that this would drive innovation and entrepreneurship across the nation by among other things mitigating the cost that startups, for example, would face were they to set up their own offices.

Here are the crucial interventions required to boost growth in the real estate sector

Coworking sector anticipates policy reforms

Experts add that the upcoming budget can consider lowering the goods and services tax (GST) rate for small-scale coworking clients, which will incentivise startups, expand the industry's reach and ultimately benefit government revenue. Additionally, addressing the demand for a single-window clearance system will streamline setting up of new coworking spaces in non-metro cities, enabling operators to scale efficiently.

"We see a major opportunity in integrating coworking spaces with SEZs (special economic zones). This would create a win-win scenario, combining the coworking sector's agility and focus on innovation with the SEZs' beneficial regulations for businesses. This powerful mix could attract domestic and international companies, fuelling economic growth and fostering dynamic business hubs in tier II cities," said Sumit Lakhani, deputy CEO of Awfis Space Solutions.

With high stamp and registration duties, experts believe that a concession or allowing twice the duty paid as expenditure under income tax will encourage even the smaller deals to get registered.

"An important requirement for the coworking industry has been a lower/concessional rate of TDS (tax deducted at source) that will improve the working capital. Another measure that could be announced to intensify the growth of the coworking sector is a further and continued extension of tax holidays for startups as they would be motivated to scale up their business and enhance investment," , 315Work Avenue founder Manas Mehrotra said.

Senior living sector pushes for regulatory oversight

Senior care services fall under the 18 percent slab of GST. Ironically, while services provided by residents’ welfare associations—that by and large cater to earning individuals—are exempt (as per the central government) up to Rs 7,500 per month per unit, no such concessions are provided to seniors who are dependent on pension or interest income.

"One of the key areas that needs attention is the inclusion of services like assisted living and caregiving under insurance coverage. Currently, insurance in India predominantly covers medical expenses, leaving a significant gap in the support needed for the elderly," Ankur Gupta, joint managing director, Ashiana Housing, said.

In many other countries, insurance coverage extends beyond medical expenses to include services such as assisted living, which provides a safer and more comfortable living environment for the elderly. Expanding insurance coverage to include these services would significantly alleviate the financial burden on senior citizens and their families.

"Therefore, it is crucial for the IRDAI (Insurance Regulatory and Development Authority of India) to consider including these types of services in insurance policies. Such a move would not only provide much-needed relief to senior citizens but also ensure that India is better prepared to support its ageing population in the years to come," Gupta added.