GR Exclusive: Realty Seeks Pivotal Govt Backing In Budget; GST, Tax Reliefs To Affordable Housing

Finance Minister Nirmala Sitharaman is set to declare the interim budget of India for the financial year 2024-25 on February 1, 2024. This budget is interim and ahead of the Lok Sabha 2024 elections which will be due in April to May this year. The real estate sector is expecting pivotal backing from the government in Budget 2024. The sector hopes for policies that would drive confidence among home buyers, and push for affordable housing.

Experts hope for tax reliefs on homes, and tax exemptions on home loans which is one of the major mediums for buying houses. Furthermore, these experts are hoping for schemes such as GST reduction on under-construction properties, adjustments in raw material pricing, and commercial properties developed for leasing among others. It is believed that GST inputs on residential project prices are crucial for stability in the sector.

Broadly, these experts hope for measures which will not only catalyse growth but also address challenges in the sector. They expect the budget to recognise the vital role of the real estate sector in driving the country's economy.

Here is what some of the real estate experts mentioned about the sector's expectations from Budget 2024 to GoodReturns.In:

Rajat Khandelwal, CEO, of Tribeca Developers Said:

Approaching the fiscal year 2024-25 budget, the Indian real estate sector is actively seeking pivotal government backing. As the final budget before the 2024 Loksabha Elections looms, the industry is strategically focusing on key measures to propel realty growth. These priorities include tax relief on homes and an elevation of the tax deduction limit for home loans.

Expectations also extend to the implementation of schemes like GST reduction on under-construction properties, adjustments in raw material pricing, and the coveted infrastructure status.

With India on the trajectory to achieve a $5 trillion economy and the third-largest GDP by 2027-28, we at Tribeca hold an optimistic outlook regarding the government's initiatives to stimulate consumer demand in real estate - a sector that undeniably stands as one of the significant contributors to the Indian economy.

Sandeep Agarwal, CFO, of Elan Group said:

Anticipating the Union Budget's release, our hopes are pinned on a transformative year for Indian real estate. We seek strategic fiscal measures stimulating demand for homebuyers and developers, addressing liquidity concerns, and simplifying regulations. These actions can revive the market and foster sustainable growth. We also expect policies promoting technological innovation, propelling a digital revolution in real estate, enhancing efficiency, and global positioning. This budget holds the key to shaping our industry's future, understanding its challenges, and nurturing opportunities for resilience and prosperity.

The upcoming agenda necessitates a multifaceted approach encompassing several critical aspects. Firstly, addressing the long-standing issue of undelivered projects is pivotal to reinstating customer confidence and trust within the real estate sector. Simultaneously, there's an urgent need to redefine affordable housing parameters, specifically by revisiting and elevating the thresholds concerning area and value.

Additionally, rectifying the discrepancies surrounding GST input credit on commercial properties developed for leasing and moderating the impact of ineligible GST inputs on residential project prices is crucial for market stability. Implementing a time-bound single window clearance for government regulatory processes becomes imperative to streamline operations and foster efficiency. Lastly, considering a deferred income tax liability tied to residential property investments, through a 5-7-year moratorium on tax payments, could significantly alleviate financial pressures and encourage further investments in the sector.

Rahul Singla, Director, of Mapsko Group said:

As we stand on the threshold of a new fiscal year, the Indian real estate sector eagerly anticipates the unveiling of the Union Budget. In these unprecedented times, the real estate industry looks to the Hon'ble Finance Minister with optimism and hope for measures that will not only catalyse growth but also address the unique challenges facing our sector. Our expectation is for a budget that recognizes the pivotal role of the real estate industry in driving economic recovery. We look forward to policy interventions that promote sustainable development, encourage foreign direct investment, and streamline regulatory processes.

A well-crafted budget should stimulate demand by providing incentives for homebuyers and developers alike, ensuring a harmonious ecosystem that propels the real estate sector forward.

I am confident that the government's fiscal policies will be aligned with the vision of a resilient, robust, and progressive real estate sector. The forthcoming budget holds the key to unlocking the immense potential within our industry, paving the way for a brighter and more prosperous future for all stakeholders."

Post the Lok Sabha Elections, the winning party will present the full-fledged Union Budget for FY25, which is most likely in late May 2024 or after.