Union Budget 2024: Key Expectations of the Real Estate Sector, by the Real Estate Players, & For the Real Estate Customers

Demands Regarding Affordable Housing

As the desire for owning a property is getting stronger every day, the sales rate of the residential sector is continuing to reach further heights. And this year, without any denial, surely it will go beyond the typical growth.

Since the realtors and developers have been enjoying the boom happening in the luxury housing segment in the residential property market, they are expecting to oversee a massive bang in affordable housing, which is the area that failed to boom for several periods due to certain delays from the government. Catering to this, the real estate experts are overseeing and pushing the Union government to launch subsidy programs for affordable housing and offer potential loans and incentives for empower the homebuyers and make the task of buying a home in India easier than ever. Even the government of Modi 3.0 has permitted the construction of more than 3 crore homes under the unwavering housing scheme PMAY – Pradhan Mantri Awas Yojana, still the affordable housing segment requires more capital allocations and incentives to bounce-back well. If the government

Regarding this, Dhruv Agarwala, Group CEO, Housing.com & PropTiger.com states, “Demand and supply for affordable homes have shown fluctuating trends over the last three years across major Tier-I and Tier-II cities. In response, the upcoming Budget should focus on revitalizing both demand and supply for homes in the Rs.15-75 Lakh per unit price bracket. Introducing interest subsidy programs could incentivize potential homebuyers effectively. Also, the state governments should be motivated to reduce stamp duty on affordable housing to make them more accessible.”

Establishing Land Banks

Furthermore, to boost the supply chain in the real estate sector, the Union Budget could deploy its extensive land banks in collaboration with private players such as developers, builders, and realtors to provide the land and funds at a concessional interests and rates. Also, executing tax incentives for real estate developers to engage with affordable housing projects could fuel the likable activity into the sector. Notably, as the demand keeps on evolving in the homes under the price category between 15 to 75 lakhs, the realtors are demanding the government to take essential action to solve the alarming issue. Apart from the sector growth, it will also drive job opportunities for skilled engineers, designers and builders in the sector.

“The government should consider releasing government-owned lands at reduced rates. This includes land owned by entities, such as the Indian Railways and Port Trusts. This strategic initiative is expected to significantly contribute towards lowering the overall real estate prices”, - Dharmendra Raichura, VP Finance, Ashar Group

Discussing about the impact of budget on Real Estate, Ritu Kant Ojha, CEO, Proact Luxury Real Estate, said that, The existing 20% Tax Collected at Source on foreign real estate investments, as stipulated by the Liberalized Remittance Scheme, restricts their potential to leverage international opportunities. Lowering this rate to 5% would not only increase available capital but also enable broader portfolio diversification abroad, boosting India’s influence in international markets.

Ramani Sastri, Chairman & MD, Sterling Developers Pvt. Ltd.-

“Real estate sector plays a pivotal role in the economy, contributing significantly to employment and GDP. Hence, the upcoming budget should introduce measures that will bolster this economic context. The Indian real estate sector continues to scale new heights in 2024 driven by positive market sentiments. Economic expansion, urbanization, evolving lifestyles, rising disposable incomes, better employment opportunities, increased business activity and government policies amongst others. The desire for homeownership remains undeterred among consumers, as residential sales continue to breach previous highs. This year, the demands go beyond the usual expectation of single-window clearance and industry status, which could unlock financial advantages and streamline project approvals. There is an express need for more tax sops for both homebuyers as well as investors. The government should raise the deduction limit for interest payment on home loans from the existing Rs.2 lakh a year to Rs.5 lakh, which will add momentum to housing demand, reduce GST on under-construction properties and effect adjustments in raw material pricing. For a large section of the population, affordability remains the biggest challenge and hence there should also be expansion in the definition of affordable housing as this would expand the benefits for homebuyers and hence boost the end-user demand. Any tax exemption from rental income will also encourage greater investment in residential real estate".

A moderate reduction in GST rates for the real estate sector would also make homes more affordable and spark demand. We also expect the maximum tax rate of 30 per cent to be reduced to improve the individual's buying power. The budget should offer a degree of personal tax relief, either by ways of lower tax rates or by readjusting tax slabs, which is the need of the hour. There is a strong case for interest subsidy to first-time homebuyers as this will boost sales in the real estate sector. There is a specific need for income tax relief on a second home and positive measures with regard to long-term capital gains rationalization, which will benefit home buyers in a big way and also stimulate the real estate sector. We would also like to see announcements to enhance ease of doing business for the developers to create an overall positive climate for real estate investment. We also seek strategic fiscal measures stimulating demand for homebuyers and developers, addressing liquidity concerns, and simplifying regulations. These initiatives would not only drive growth in the real estate sector but also stimulate demand around 250 ancillary industries, thereby boosting job creation across these sectors. Overall, we hope to see policy measures that foster sustainable growth and address key challenges facing the industry in the upcoming budget”.

Manas Mehrotra, Founder, 315Work Avenue-

“The country is seeing a new office culture given the change in work patterns across the world and new preferences of the workforce. Understandably, the coworking industry has become more relevant than ever with the demand surging significantly in recent times owing to its affordable pricing options and flexible work culture. Large enterprises too have shifted gears to coworking space as they embraced the hybrid work model to suit their organizational requirements. India continues to be the fastest growing flex office market in the APAC region and is set to account for one-fifth of the office market by 2030. Taking into consideration the popularity of hybrid working, we have a few expectations around GST and taxation from the upcoming Union Budget that can further accelerate growth of this sector".

In recent years, the entrepreneurial landscape has undergone a significant change and coworking spaces have emerged as a transformative force in India’s startup ecosystem. Some of the measures that we could look forward to include a lower GST rate for small-scale coworking clients. This will significantly help the coworking industry boost their footprints by attracting small start-ups to be part of the industry”.