Budget 2024: Expectations Of Real Estate Sector

The housing industry is ready and waiting for forthcoming proposals, which may involve a reevaluation of GST rates, adjustments to tax deductions, allocation of land, and increases in funding.

Developers should have the flexibility to opt for either paying GST at a reduced rate without input tax credit (ITC) or opting for a higher tax rate and utilising ITC for residential projects.

Construction services offered without any charges to tenants, society members, and slum dwellers in the context of redevelopment should be exempt from GST implications.

The definition of an affordable residential apartment should be based on the carpet area of the unit rather than the gross amount charged. This distinction is important, especially in metro cities where apartment values can be substantially elevated due to high land costs.

Granting industry status to the real estate sector is crucial. The industry is eagerly awaiting influential policies that will stimulate growth through tax incentive measures, making it more attractive for homebuyers.

The duration for holding residential properties as long-term capital assets should be reduced to 12 months, aligning it with current market dynamics.

The requirements extend beyond the typical expectations of a single-window clearance and industry status, which could unlock financial benefits and streamline project approvals. There is a clear demand for additional tax incentives for both homebuyers and investors.

The government should increase the deduction limit for interest payments on home loans from the current Rs 2 lakh per year to Rs 5 lakh. This move would boost housing demand, decrease GST on under-construction properties, and lead to adjustments in raw material pricing.

The primary challenge lies in affordability, and therefore, there should be an extension of the definition of affordable housing. This expansion would increase the advantages for homebuyers, consequently boosting end-user demand. Additionally, providing tax exemptions on rental income would further encourage greater investment in residential real estate.

There is a compelling argument for providing interest subsidies to first-time homebuyers, as this measure would enhance sales in the real estate sector. There is a specific requirement for income tax relief on second homes and positive actions towards rationalising long-term capital gains, which would significantly benefit homebuyers and stimulate the real estate sector.