As the Union Budget 2024 draws near, the real estate sector pins hope on getting the much-awaited industry status along with major policy reforms, push for affordable housing sector and tax incentives to strengthen the homebuyers’ sentiments and attract investment to the sector.
Experts anticipate several reforms, including a simplified single-window clearance system, tax rebate on housing loan interest and revision in the GST input tax credit rules will further boost the sector.
Union finance minister Nirmala Sitharaman will present the budget on July 23.
Pradeep Aggarwal, Founder and Chairman, Signature Global (India) Limited, said that the real estate sector anticipates several key reforms in the budget to drive growth and efficiency.
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“Granting Industry status to real estate sector will attract investments and streamline regulations. A simplified single-window clearance system will expedite project approvals, reduce delays, and enhance overall project execution. Revising the GST input tax credit rules will reduce property prices and increase transparency,” he said.
Dhruv Agarwala, Group CEO, Housing.com and PropTiger.com, said that the longstanding demands of the sector such as granting real estate sector an industry status and raising tax exemption limits on home loan repayments, should be considered to sustain long-term growth in the housing sector.
Push for affordable housing
Apart from a major allocation to Pradhan Mantri Awas Yojana (PMAY), experts say initiatives such as the Credit-Linked Subsidy Scheme (CLSS) under PMAY and tax incentives for developers can help boost the segment at large.
Arvind Nandan, Managing Director – Research & Consulting, Savills India, said that the sector anticipates a strong emphasis on infrastructure and innovation to address the housing deficit in both rural and urban areas, particularly through schemes aimed at enhancing rental housing.
“Potential tax relief, including adjustments to income tax exemption limits in the new tax regime, could significantly benefit lower-income earners. We also foresee further support for the affordable housing sector through reinstated PMAY incentives, while GST reforms will be crucial for ensuring nationwide accessibility,” Nandan said.
Developer bodies like NAREDCO have also demanded that the second tranche of the Special Window for Affordable and Mid-Income Housing (SWAMIH) fund should also be launched with Rs 50,000 corpus in the upcoming union budget for FY 2024-2025.
G Hari Babu, President of the National Real Estate Development Council (NAREDCO), said that the definition of an affordable residential apartment, which currently includes criteria for carpet area and a price cap, also needs revision.
NAREDCO recommends retaining only the carpet area condition without the price limit. This change would accommodate higher land prices in metro cities and extend affordable housing benefits to more projects, enabling a larger portion of the lower and middle-income population to buy homes.
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