Budget 2024 Real Estate: ‘Modify Qualifying Standards For Affordable Housing’ – Outlook India

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As the Union Budget 2024 approaches, stakeholders in the real estate sector are voicing their expectations, underscoring the need for growth and stability in the industry.

With Union Finance Minister Nirmala Sitharaman set to present the interim Budget on February 1, all eyes in the real estate sector and the nation as a whole are focused on the crucial measures that will shape the industry’s trajectory in the coming fiscal year.

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The real estate community looks at the upcoming budget with hope, seeking a strategic roadmap that aligns well with the evolving needs of stakeholders including end-users, developers, and investors.

“Housing, infrastructure development, sustainability and digitization will remain at the core of the budget, which will go a long way in supporting real estate growth across segments in the long term. Enterprise value (EV) infrastructure, renewable energy and green financing will continue to remain in focus creating a strong base for a sustainable future. Incentivisation of green buildings through minimum alternate tax or tax breaks similar to infrastructure sector will be particularly beneficial.” 

“Meanwhile, retail investors are calling for additional rationalising of the capital gains tax structure. The Union Budget 2024-25 should explore initiatives to boost greater retail engagement in real estate investment trusts (REITs) and infrastructure investment trusts (InvITs).

Moreover, alterations to personal tax slabs have the potential to fuel consumption across various sectors, including real estate assets and allied sectors,” Badal Yagnik, Chief Executive Officer, of Colliers India, a real estate services and investment management company, said. 

Moreover, the homebuyers are anticipating increased tax benefits in the upcoming budget. One key expectation is to elevate the current Rs 2 lakh tax rebate on housing loan interest under Section 24 of the Income Tax Act to a minimum of Rs 5 lakh.

“This adjustment is crucial to bolster housing demand, especially within the affordable housing segment. Additionally, a reassessment of the price bracket for affordable housing is necessary, particularly in cities like Mumbai, where the current limit of Rs 45 lakh is impractical. Raising this limit to Rs 75 lakh or beyond will significantly benefit a broader spectrum of homebuyers, fostering affordability and driving housing demand. Furthermore, a reduction in the prevailing 20 per cent capital gains tax is recommended. This move will incentivize investments, subsequently fostering increased economic growth and stability,” Piyush Bothra, co-founder and Chief Financial Officer, Square Yards, a proptech platform, said. 

While the real estate industry’s outlook for 2024 is currently positive, the results of the upcoming general elections will also have a significant impact on the demand for and growth in residential real estate.

The real estate industry invariably presents the Finance Ministry with a very ambitious wish list every year before the annual Union Budget. Industry status for the housing sector and single-window clearance for housing projects are standard asks and remain in place this year, as well.

Since the pace at which the issues that the real estate sector faces get resolved is generally quite slow, these expectations haven’t changed much – though they’re as pressing as ever.

That said, we must have reasonable expectations for the interim budget, which will be unveiled before the general elections.

Here are some of the other key expectations from the real estate stakeholders: 

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