Budget 2024 For Affordable Housing? Home Loan Interest Rate Rebate To Tax Benefits, Key Factors To Look Out

The Union Budget 2024 which will be announced by Finance Minister Nirmala Sitharaman this month is likely to be a gateway for boosting further affordable housing amidst the current scenario where property prices have risen and home loan rates are at multi-year highs since policy repo rates have been kept unchanged for over a year now. Real estate developers and experts are expecting key measures that could not only make housing a sweet experience for first-time buyers but also uplift the home loans segment alongside demand.

Here are key expectations for Budget 2024:

1. Home Loan Interest Rate Deduction Cap:

Amrita Gupta, Director of Manglam Group and Founder President of CREDAI Rajasthan Women's Wing said, "As we look forward to the upcoming budget, our focus at Manglam Group remains firmly on enhancing housing affordability in popular cities like Jaipur, Udaipur, Goa, etc. The present scenario of soaring property prices demands immediate policy measures. Firstly, we are hopeful that the government will increase the interest rate deduction cap to Rs. 5 lakh. Such a move will significantly lighten the financial load on homebuyers. Additionally, redefining 'affordable housing' to accommodate the realty prices could dramatically widen the pool of beneficiaries."

Atul Monga, CEO and Co-Founder, of Basic Home Loan also said, A primary expectation is to enhance the tax rebate on home loan interest under Section 24 of the Income Tax Act from ₹2 lakh to ₹5 lakh. This aims to boost housing demand, particularly for budget homes, which have seen a decline in sales since the pandemic."

2. Affordable Rental Housing:

According to Amrita, real estate expects continuous support through incentives for affordable rental housing and significant tax benefits for first-time homebuyers. The reintroduction of GST with an input tax credit can catalyze construction activities by reducing the overall project costs, which ultimately benefits buyers. Proposals can also include broad tax reliefs, a streamlined single-window clearance process, a reduction in home loan interest rates, and a revitalization of subvention schemes.

3. Women's Career Advancement In Real Estate:

Further, Amrita also recognizes the importance of empowering women through enhanced participation in the workforce and promoting initiatives that support women's career advancements and leadership roles in real estate and beyond. She said, "Such proactive measures would strengthen the foundation of urban affordable housing and contribute immensely to sustainable urban development."

4. Tax Rationalization:

In Aditya Kushwaha, CEO and Director Axis Ecorp views, tax rationalization for construction raw materials and reduced approval costs are crucial to creating a more conducive environment for investment and development.

Kushwaha added, "Transparency has significantly boosted the real estate sector and further prioritised it by strengthening RERA and enhancing digital platforms for property transactions can foster trust and reduce fraudulent activities. Streamlining project approvals through a single-window clearance system is essential to address approval delays, which are significant bottlenecks. Additionally, continued focus on infrastructure projects will benefit the real estate sector and boost the travel and tourism industry."

This full-fledged Budget will be announced after the Lok Sabha Election 2024 where PM Modi and his party secured a big win for the third time in a row. Finance Minister Nirmala Sitharaman will be presenting the overall Budget 2024, most likely on July 23 or 24th.