New Delhi, July 02, 2024: The real estate sector plays a vital role in the economy, contributing significantly to employment and GDP. Hence, the upcoming budget should introduce measures that will strengthen this economic context.
The Indian real estate sector will continue to scale new heights in 2024 driven by positive market sentiments, economic expansion, urbanization, changing lifestyles, rising disposable incomes, better job opportunities, increased business activity, and government policies, etc.
The desire to buy a home remains strong among consumers, with residential sales surpassing previous highs. This year, the demand is beyond the usual expectation of single-window clearances and industry conditions that can yield financial benefits and streamline project approvals.
There is a clear need for more tax breaks 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 annum to Rs 5 lakh, which will boost housing demand, reduce GST on under-construction properties, and adjust raw material prices.
Affordability remains the biggest challenge for a large section of the population and hence the definition of affordable housing should also expand as this will expand the benefits for homebuyers and hence boost end-user demand. Any tax breaks on rental income will also encourage more investment in residential real estate.
A modest reduction in GST rates for the real estate sector will make homes even more affordable and boost demand. We also expect the maximum tax rate of 30 percent to be reduced to improve the purchasing power of the individual. The budget should offer a degree of personal tax relief, either through 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 particular need for positive measures about income tax relief on second homes and long-term capital gains rationalization, which will benefit homebuyers in a big way and also boost the real estate sector.
We would also like to see announcements to enhance the ease of doing business for developers to create an overall positive environment for real estate investment. We also demand strategic fiscal measures to stimulate demand for homebuyers and developers, address liquidity concerns, and simplify regulations.
These initiatives will not only boost growth in the real estate sector but also spur demand in 250 ancillary industries, thereby boosting job creation in these sectors. Overall, we expect to see policy measures in the upcoming budget that promote sustainable growth and address key challenges faced by the industry.