Budget 2025: Easier loans for seniors, and ease of doing business for startups, needed to boost senior housing and co-working space segments

Will the Union Budget 2025 revive the affordable housing segment in India?

More options to finance a home, lower taxes and statutory payments - these are among a few measures that the senior living segment of the real estate industry is hoping for in this year's Union Budget.

In another sunrise sector in real estate, co-working spaces, operators say that more measures should be put in place to make it easier for start-ups to do business.

Senior living has been identified as a $7.7 billion opportunity in India by 2030, with the target market for senior homes estimated to be at nearly 2.3 million units by that year. However, the current penetration for senior homes remains at around 1.3 percent, far lower than those of economies such as the United States and Australia, according to a report from the Association of Senior Living India (ASLI) and JLL.

India's senior population is expected to reach 35 crore by 2050. The increase in senior population is expected to be spread across both Tier-I cities and in secondary markets, as families become smaller and younger people move cities for better employment opportunities. That leaves seniors behind, often with little support in the face of increasing health issues and reducing mobility. In such cases, the need for dedicated senior living facilities may become essential, with tailor-made services for elders to use, such as hospitals and other social infrastructure within the housing complex, and more concierge services.

Some developers who have tapped into the senior living market say that more support should be put in place for elderly homebuyers, including new and innovative mortgage solutions, to help them buy new senior living homes without having to touch savings.

"It would be good if the budget could include new measures to put in place a reverse mortgage mechanism, similar to the United States. This can help seniors in India buy senior homes, without selling off their old homes or liquidating their savings. Another reform can be put in place in terms of the goods and services tax, because society maintenance charges attract a GST rate of 18 percent. For senior homes, maintenance charges form a big chunk of expenses for residents, due to the services that are needed for such housing societies," said Amit Paranjape, head of business development at Paranjape Schemes. The company has a portfolio of dedicated senior living homes under the Athashri brand.

The government should also ease the taxation burden on healthcare needs of senior citizens, including those who need home care services in senior living facilities, observers added.

"The government should ⁠consider pushing insurance companies to create healthcare insurance schemes tailored for residents of SL communities, ensuring coverage of long-term and home care services, and also consider reducing GST applicability on essential health care services to 5 percent or lower," said Samantak Das, chief economist at JLL India.

Co-Working Segment

With the co-working segment finally reaching scale after a decade of incremental growth, operators in the space say that the budget should include measures to accelerate the ease of doing business for start-ups, which include co-working space firms themselves, as well as tech and non-tech start-ups that continue to form a large portion of occupiers in co-working spaces.

Some of these companies also added that the Union Budget should make it easier for overseas firms to set up global capability centres (GCCs) to be based in India. Such GCCs are increasingly being set up in co-working spaces, due to the flexibility being offered to scale up in a relatively short timeline.

"With booming demand in commercial real estate, the flexible workspace industry is poised to play a crucial role in meeting the evolving needs of modern businesses. Simplifying processes for GCCs (Global Capability Centers) to set up offices in India will further enhance the country's position as a global business hub. Initiatives to streamline investments and enhance urban infrastructure will empower us to drive growth and innovation while contributing to India’s economic progress," said Rajat Kapur, Managing Director of North India, United Arab Emirates, and Kingdom of Saudi Arabia at The Executive Centre, a co-working space operator.