As the real estate and infra market witnesses a surge, the sector’s expectations from Finance Minister Nirmala Sitharaman are high for Budget 2024 to bring in robust policies, tax breaks, and funding to boost the industry.
Here’s a breakdown of their perspectives:
Shital Gupta, Chief Sales Officer (Plywood) of Greenpanel Industries Ltd)
In the upcoming budget, a focus on the Housing and Construction sector can be a game-changer for the plywood industry. Increased allocations for housing projects and rural infrastructure development can drive demand for plywood in furniture and construction. Emphasizing quality with budgetary support for certification initiatives will boost consumer confidence.
Sustainable forest management practices ensure a reliable raw material supply, promoting environmental responsibility. Budgetary provisions for research, technology adoption, and skill development can modernize the industry, improving efficiency, and product quality, and addressing the skilled labor shortage. This strategic approach aligns with economic growth and industry sustainability.”
Hira Ludhani, Director, Evershine Group
In the upcoming interim budget, I anticipate a renewed focus on affordable housing with incentives such as simplified housing loan processes and interest subvention, making homebuying a desirable experience, especially for first-time buyers.
Additionally, I hope to see initiatives that promote sustainability within the industry to drive eco-friendly practices and technological advancements. I look forward to witnessing these changes leading to a successful year of growth in real estate.
Vihang Sarnaik, Director, Vihang Group
A critical facet of my expectation from the Budget is the re-evaluation of affordable housing criteria. I expect the Honourable Finance Minister will find some merit in establishing a separate affordable housing index for each Tier-1 and Tier-2 cities with impetus to the housing affordability of the Metro Cities Periphery. It is crucial to incorporate essential factors such as inflation, land cost, construction cost, approval cost, and labor cost for defining affordability in housing.
For instance, in the case of Mumbai, where housing costs are notably high, we hope that the Budget will increase the price ceiling of affordable housing from ₹45 lakhs to ₹90 lakhs so that the whole affordable scheme benefits reach its intended audience. As per the current affordable housing scheme, the limit is set at ₹45 lakhs and you will not find a single home in Mumbai in that price bracket. So, the scope of availing the full benefit of credit link subsidy under PMAY is non-existent in Mumbai.
According to me, the Government should redefine affordable housing and extend the Credit Linked Subsidy Scheme (CLSS) and Pradhan Mantri Awas Yojana (PMAY) to a larger audience as per the existing real estate prices prevalent in the city and not make it centralized. I think such a move will empower the unorganized sections and salaried professionals to fulfill their dream of owning a home in a city like Mumbai.”
Nikunj Sanghvi, Managing Director, Veena Group & Treasurer, CREDAI-MCHI
In the context of the upcoming budget and the proposed housing loan scheme, addressing gender disparities in property ownership emerges as a pivotal aspect deserving attention. With a stark 3% ownership rate among women compared to men in India, the Government must consider targeted measures in this budget.
An optimistic expectation is the introduction of tax benefit schemes exclusively designed for working women. Envisioning a tax saving scheme offering up to ₹3 lakh on the principal amount for their initial home purchase.
Such an initiative not only serves as an incentive for property ownership but also contributes significantly to fostering gender equality and empowering women financially. The government should also offer an additional 1 or 2 percent interest waiver for women under the new credit-linked housing loan scheme.
The tax benefit combined with the interest waiver is poised to be a compelling catalyst, further attracting women to invest in real estate. Moreover, a potential exception to the section 24(b) cap of ₹2 lakh on interest paid by first-time female homebuyers would not only encourage their entry into the real estate market but also pave the way for greater financial independence among women in our society.
Madan Jain, Chairman, Bhairaav Group and President of CREDAI-MCHI Navi Mumbai
In anticipation of a pivotal general election, the interim budget holds the potential to make significant strides in fostering economic inclusivity, with a focus on tax exemptions for home purchases. A key expectation is the introduction of a tax exemption up to Rs 5 Lakhs, encompassing Rs. 2 Lakhs on the Principal Loan Amount and Rs. 3 Lakhs on Home Loan Interest.
This proposed fiscal measure, coupled with the government’s commitment to a credit-linked home loan subsidy, underscores a dedicated effort to alleviate financial burdens for the salaried middle class.
The envisaged synergy between tax reforms and a targeted approach to affordable housing not only promises to invigorate the real estate sector but also aims to enhance financial inclusivity by broadening access to homeownership opportunities.
The transformative potential of such initiatives aligns seamlessly with the overarching goal of creating a more equitable society. This will mark as a progressive stride in economic policies, signaling the government’s dedication to relieving financial pressures and nurturing an inclusive economic environment.”
Ajay Nemani, Founder, FF21- Real Estate sector
As we approach the Budget 2024-25, expectations across the board are at an all-time high. Coliving business is no different. The housing option is positioned to address the increasing need for flexible and hassle-free accommodation solutions with its innovative strategy and focus on communal living.
The industry and other stakeholders have long desired that the government grant the coliving/student housing sector industry status. This will aid in the formalization of the industry and its participants, allowing for easier access to finances and other benefits. Furthermore, industry status would provide the sector with a larger voice in policy choices, ensuring that coliving housing providers’ demands and concerns are effectively handled.
The application of GST laws has been inconsistent due to a lack of precise definition, affecting tax compliance. Housing, a necessity, expects the government to review tax slabs and maintain the lowest effective rate for end customers.
Because the coliving industry fills a need for long-term accommodation/housing, it would be beneficial if the government could consider classifying these as residential services so that applicable utility rates are in line with residential units rather than current commercial slabs.
As a whole, the industry believes that it is meeting a significant demand by providing housing/accommodation services that go beyond simply giving a place to live to establishing lively communities of young inspirational people wanting to contribute to the economy’s progress. Working together with the government to carve out a niche for this industry will benefit the participants, end consumers, and government in the long run.
Sunil Pareek, Executive Director, Assetz Property Group
The Real Estate Sector looks forward to the Union Budget 2023–24 as a catalyst for demand and increased opportunities in the housing market. Essential policy support, potential infrastructure status, streamlined processes, financing availability, and GST rationalization are crucial in the coming year.
Enacting policies to enhance tax deductions for home loans, reduce long-term capital gains tax on property investments, and address affordable housing is essential.
The budget should simplify tax rates, minimize administrative barriers, and focus on personal tax relief by revisiting tax slabs and increasing the deduction limit under Section 80C. Revised income tax slabs can benefit the real estate sector by reducing overall tax expenditure and attracting new buyers through expanded income tax deductions. Developers expect input tax credits, reduced stamp duty, and registration costs to lower project expenses.
Rationalizing GST rates for building materials like steel, cement, and tiles is also important. Affordability criteria should be revised to at least Rs. 60 lakhs for a broader scope, enabling more homebuyers to benefit from subsidies.
With strong consumer demand and favorable market conditions, we believe that further standardization of circles and interest rates in the upcoming budget for 2024 will prove beneficial for the real estate sector. Additionally, increasing the Income Tax Act Section 24’s home loan interest rate rebate from ₹2 lahks to at least ₹5 lahks can empower the housing market, boosting demand and creating opportunities for end consumers.”
Bhavesh Kothari, Founder and CEO, Property First
I think this year’s budget will enable the real estate sector to explore new things and will create a win-win for both buyers and builders. While the expectations are certainly high, one of the key things that will turn favorable for the sector is tax rationalization.
Having said that, special attention is needed when it comes to capital tax gains. The reduction in the prevailing capital gain tax will not only create optimism among retail investors who are looking for simplification but will also incentivize more investments in REITs and infrastructure investment trusts (InvITs). Besides, the sector is also eagerly waiting for policy incentives and re-introduction of schemes that favor the end users, which in turn will generate more demand in the market.”
Angad Bedi, Managing Director, BCD Group
With the upcoming budget around the corner, certain expectations could add up to the existing bullish sentiment prevailing in the real estate market. One of the key expectations from the government is a robust policy impetus to boost the industry.
This could be in the form of tax breaks, rebates, and allocation of funds, to create favorable conditions for both the builders and buyers. Another important move would be the focus on ‘affordability’. While the luxury segment grew exponentially, in the last one or two years the sales of affordable homes saw a decline. I hope this budget will re-look at the qualifying cost that impacted the affordable segment and will take steps to revive the segment.
Ashok Singh Jaunapuria, MD & CEO, SS Group
As we stand at the threshold of the dawn of a new financial year, we are eagerly awaiting the release of the Union Budget 2024-25.
With Indian real estate peaking in 2023, we are confident that this buoyant trend will continue well into 2024 as well in the backdrop of a healthy macroeconomic outlook, an uptick in the job market, and stable lending rates.
This year could be the year of reckoning if the government can focus on the affordable housing segment. Through carefully curated policy impetus and fiscal support, the government should look at giving a boost to this segment which will bridge the widening housing gap.
Another important element we are seeking from the Union budget 2024 is to increase the home loan interest rebate from the existing Rs.2 lakh to Rs.5 lakh. This will attract genuine home buyers and boost demand. Finally, a single-window clearance to reduce roadblocks and speed up projects together with RERA amendments will be a great boon.
Amit Mishra, Co-Founder of 91Squarefeet
The real estate industry stands as a cornerstone in India’s economic growth, emerging as one of the largest employment-generating sectors.
The government should consider augmenting allocations for infrastructure projects to propel real estate growth in urban areas.
Additionally, implementing a unified GST solution for real estate developers, enabling them to claim input tax credits for all construction materials, would not only lead to a reduction in property prices but also enhance transparency throughout the supply chain.
Moreover, there is a pressing need to incentivize financial institutions to create a more conducive financing environment for both real estate developers and contractors. These measures would serve as catalysts for expediting real estate projects and fostering infrastructure development.
Lalit Ahuja, CEO ANSR
With the Tier 1 cities getting saturated, it will be encouraging if the budget can introduce steps to enhance the infrastructure and connectivity measures. Boosting infrastructure development in Tier 2 and Tier 3 cities like Jaipur, Ahmedabad, Kochi, and Indore, among others, is vital for furthering the growth of GCCs.
While Bengaluru, NCR, Hyderabad, Pune, Chennai, and Mumbai remain prime GCC destinations, expanding infrastructure and connectivity measures in these emerging cities would open new avenues for GCC development. Incentivizing the establishment of GCC parks and hubs in these regions can diversify opportunities and foster balanced growth across the country, ensuring a more inclusive and distributed GCC landscape.
Krishnan S Iyer, CEO, NDR InvIT Managers Pvt Ltd
Infrastructure and Logistics are critical components of an Economy, and are sure to play a vital role, in our march to a $5 trillion economy; in addition, they also play an indirect role in the Social Development of the Country. The NLP that was formulated by the Government is positive, and for it to have a greater impact, we are hoping for additional resource allocation and a rationalization of taxes.
