Mumbai: The real estate sector experienced a significant surge in 2023, recording high property sales across various housing segments. With optimism running high, the industry hopes to maintain this momentum into 2024 as well but with some help from Finance Minister Nirmala Sitharaman.
The sector plays a critical role in the economy and contributes around 8% of the GDP. It is also the second biggest employment generator after the agriculture industry and more than 200 ancillary industries rely on it.
As we swing into the budget season, we spoke to some top real estate industry experts to understand what they were looking forward to in the forthcoming interim budget to be presented on February 1.
A key aspiration for the coming year is the Finance Minister’s response to our request to increase the tax slab to Rs5 lakh per annum for interest rate deduction, up from the current Rs2 lakh. It should also look into other parameters, such as reducing repo rates, offering tax holidays to developers, and finding other alternative sources of project funding.
With property prices in metro cities skyrocketing, the industry would like a revision of the cap in the credit link subsidy scheme. Raising the limit from Rs45 lakh to Rs1 crore for metro city home buyers will significantly benefit the affordable housing segment
The industry would like to urge the government to introduce tax benefits for first-time homebuyers and reconsider the implementation of GST with an input tax credit on under-construction properties. Such measures will help lower property rates and stimulate demand.
The government should also closely examine the affordable housing segment in this budget. Despite being a promising sector before the pandemic, it experienced a decline in sales. Currently representing only 20% of total housing sales, a notable drop from the pre-pandemic 40%, the affordable housing segment requires targeted policy measures, tax incentives, and financial support to facilitate its revival.
We would like an expansion of the SWAMIH Fund to ensure timely completion of stressed projects. This will not only assist developers but also reinforce homebuyer confidence by delivering projects on schedule.
The real estate sector is gearing up for another year of robust housing demand. As per analysts, the residential real estate market is projected to stay within affordable bounds, reaching its highest point in three years by 2024. The JLL Home Purchase Affordability Index suggests that major metro cities such as Mumbai, Delhi NCR, and Chennai will lead the upswing in the real estate sector.
Sandeep Runwal, President, NAREDCO, Maharashtra
A long-standing demand of the property sector has been the granting of ‘industry status’ to real estate. This year, we are hopeful that the Finance Ministry will address this issue.
There’s a call to redefine the definition of affordable housing, proposing an increase in the cap from Rs45 lakh to Rs1 crore, particularly in Mumbai. Where in the city can you get a 1 BHK for Rs45 lakh now? This definition needs to be revised.
The industry also anticipates the continuation of incentives for affordable rental housing schemes. Tax reliefs for such projects could accelerate investment and aid in achieving the ambitious ‘Housing for All’ goal. Further expectations include tax benefits for first-time homebuyers and the re-introduction of GST with an input tax credit on under-construction properties.
We would also like to see some tax reliefs, single window clearance, and reduced home loan interest rates. The reintroduction of subvention schemes is also on the wish list, which would assist homebuyers in aligning their payments and encourage home buying decisions
Leave Comments