Budget 2024: From Interest Subsidy to Tax Relief, Housing Sector Expects Growth and Stability

Union Budget 2024: As Finance Minister Nirmala Sitharaman prepares to present the first budget of Prime Minister Narendra Modi’s third term, the real estate sector is teeming with anticipation. Industry players are hopeful for measures that will drive growth and stabilize the market. Key stakeholders have been vocal about their priorities, advocating for reforms and initiatives that address critical challenges and foster sustained development in this pivotal budget.

P24 News Media

June 30, 2024

1 minute

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Business

ax Incentives for Homebuyers

Prashant Sharma, President of NAREDCO Maharashtra, emphasized the need for enhanced tax benefits for homebuyers. He highlighted the importance of increasing deductions under Section 80C and Section 24(b), which would significantly boost housing demand.

“Increasing the limit of deduction on home loan interest will make home ownership more attractive and affordable for the common man,” Sharma stated.

Additional Measures Suggested

Single Window Clearance: Sharma advocated for the introduction of a single window clearance system for all real estate projects. This would streamline the approval process, reducing delays and costs, thus accelerating project completion and enhancing the ease of doing business in the sector.
Incentives for Affordable Housing: Continued focus on affordable housing is crucial. Sharma urged the government to extend benefits under the Pradhan Mantri Awas Yojana (PMAY) and provide additional incentives to developers engaged in affordable housing projects. He also called for redefining the definition of affordable housing, proposing an increase in the cap from Rs 45 lakh to Rs 1 crore, particularly in metro cities, to bridge the housing gap for economically weaker sections.

Addressing Liquidity Issues

The real estate sector continues to face liquidity challenges. Sharma expressed the expectation for budget measures that ensure easier access to financing for developers, especially small and medium-sized enterprises. He suggested enhancing the flow of funds through banking and non-banking financial institutions and increasing the SWAMIH stress fund with a second tranche of Rs 50,000 crore to complete stalled projects and ensure adequate liquidity.

Reforms in Land Acquisition

Simplifying land acquisition processes and reducing associated costs will be instrumental in boosting real estate development. Transparent and fair land acquisition policies will encourage more developers to undertake new projects.

Focus on Rental Housing

To cater to the urban population and migrant workforce, policies promoting rental housing should be prioritized. Sharma called for incentives for developers to build rental housing projects to address the diverse housing needs.

Digital Transformation

Encouraging the digital transformation of the real estate sector through technological advancements and digital infrastructure will lead to greater transparency and efficiency. Incentives for adopting PropTech solutions will further modernize the sector.

Infrastructure Status for Real Estate

Pritam Chivukula, Co-Founder & Director of Tridhaatu Realty and Vice President of CREDAI-MCHI, urged the government to grant infrastructure status to the real estate sector.

“It will facilitate easier access to funding at lower interest rates, reducing the cost of capital for developers and accelerating infrastructure development, leading to overall economic growth,” Chivukula stated.

Revival of Stressed Projects

Chivukula also highlighted the need for special provisions and financial packages to revive stalled and stressed real estate projects. This would protect homebuyers' interests and ensure project completion, clearing unsold inventory and reviving the real estate market.

Relaunch of the CLSS Scheme

Mohit Jain, Managing Director of Krisumi Corporation, expressed anticipation for the relaunch of the Credit Linked Subsidy Scheme (CLSS) to boost housing demand across various segments. He also reiterated the need for a single window clearance system for project-related approvals to reduce delays.

GST Reform in Real Estate

Vedanshu Kedia, Director of Prescon Group, suggested rethinking the current Goods and Services Tax (GST) structure for the real estate industry. Allowing an input tax credit for expenses made by real estate companies could help manage cash flows better and make properties more affordable for end users. He advocated for the rationalization of GST rates to reduce the cost burden on homebuyers and developers.

NRIs and Real Estate

Kedia also pointed out that Non-Resident Indians (NRIs) are significant contributors to the Indian real estate market. Simplifying regulations, providing tax benefits, and ensuring a hassle-free repatriation process would attract more NRI investments, boosting the sector.

Focus on Millennial Buyers

Samyak Jain, Director of Siddha Group, highlighted the importance of catering to millennials, who represent a substantial portion of potential homebuyers. He urged the government to introduce targeted schemes for millennials and first-time homebuyers to make homeownership more accessible and inject fresh demand into the housing market.

The real estate sector eagerly awaits the Union Budget 2024, hoping for policies that will drive growth, stability, and sustained development.