Union Budget 2024: Overview of the union budget Impact on Real Estate

The Indian real estate market has been growing rapidly in recent months due to increasing urbanization, regulatory changes, higher incomes, and rising consumer confidence. As Budget 2024 approaches, the real estate industry has several hopes, including lower GST rates, reduced interest rates on home loans, a general decrease in property prices, a more efficient system for getting approvals, and the development of new areas outside city centers. The real estate sector has played a significant role in boosting the country’s economic growth.

1. Lower GST Rates and Interest Rates: 

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Hopes are high for a reduction in GST rates and home loan interest rates. This could lower property costs and make real estate more affordable for both developers and buyers. The GST input tax credit rule is also expected to bring more transparency and reduce costs.

2. Industrial Status for Real Estate:

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One major hope is for the real estate sector to be granted industrial status. This would lead to easier access to funding and simplified regulatory procedures, benefiting the entire industry.

3. Affordable Housing: 

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 The government’s “Housing for All” initiative is expected to gain more support in this budget. This might include reviving credit-linked assistance programs and broadening the definition of affordable housing to include homes with larger carpet areas priced between ₹65 lakhs and ₹75 lakhs. Additionally, there’s a proposal to increase the Section 80C principal repayment deduction from ₹1.5 lakh to ₹2.5 lakh, which would make mortgages more accessible and affordable.

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Also read: PMAY Urban Scheme 2024

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4. Sustainability Focus:

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There’s growing interest in incentives for eco-friendly and sustainable housing projects. These incentives might include favorable loan terms, subsidies, and tax benefits for developers and buyers who prioritize green building practices. This focus on sustainability would reduce the carbon footprint, promote energy efficiency, and offer long-term savings and better living standards.

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Also read: How to Pay AP Property Tax

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5. Infrastructure Development:

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The government is expected to take steps to promote infrastructure development, streamline regulatory processes, and offer incentives for green building techniques. These measures would encourage investment and ensure long-term economic stability in the real estate sector.

In the words of some experts:

Angad Bedi, Managing Director of BCD Group, emphasizes that the real estate sector needs industry status to help achieve the government’s goals of providing housing for all and reaching a $5 trillion economy by 2025. “The government should focus on strengthening sector regulations, including RERA, implementing single-window clearances for all approvals, and ensuring swifter resolution of stalled projects to accelerate growth,” he stated.

The chairman and managing director of Sterling Developers Pvt. Ltd., Ramani Sastri, recommends that the government raise the annual deduction cap for house loan interest payments from the existing ₹2 lakh to ₹5 lakh. This change would boost housing demand. He highlights that “affordability is a major challenge for many people, so expanding the definition of affordable housing would extend benefits to homebuyers and stimulate demand. Additionally, he mentions that providing tax exemptions on rental income could encourage more investment in residential real estate.”

Madhusudan G., Chairman and Managing Director of Sumadhura Group, expressed hopes for the Union Budget 2024–25 to introduce progressive reforms to address the increasing demand for residential and commercial spaces. “Our top priorities include tax breaks for affordable housing projects to invigorate stagnant sales in the sector. Additionally, reviving the credit-linked subsidy scheme will make homeownership more accessible,” he said.

Conclusion:

Budget 2024 has the potential to be a game-changer for Indian real estate. With a focus on tax cuts, easier loans, and industry status, the sector could see a significant boost. Affordable housing seems to be a key priority, with proposals to make it more accessible and incentivize green building practices. Overall, the industry is optimistic that the budget will address growth, affordability, and sustainability, paving the way for a brighter future.

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