Union Budget 2023 Wishlist for the Real Estate Sector in India
T
he Union Budget 2023 is a much-anticipated event for the real estate sector in India. Industry experts and stakeholders have high expectations from the government as they hope to see a number of reforms and initiatives that can help boost the real estate market and encourage investment in the sector.
The area of interest for the real estate sector is tax incentives. Real estate developers and investors are hoping for tax breaks and other financial incentives that can help lower the cost of developing new projects and make it more profitable for them. This can also encourage more investment in the sector and help boost the economy as a whole.
Pankaj Bansal, M3M India said, "The middle class has been looking to increase its disposable income to increase its investment in real estate, particularly the residential sector. This investment can grow multi-fold if the Union Budget brings in considerable relaxation in tax benefits on home loans. Further, buyers who want to own bigger flats and are looking to sell their existing properties are also reluctant due to stringent capital-gains tax. Gains from the sale of real estate held for over two years are subject to a long-term capital gains tax of 20 per cent. This should be set at least at 10 per cent. Additionally, the upcoming budget must lower the holding time for property from the current 24 to 36 months to 12 months in order to qualify it as a long-term capital asset. Such measures would certainly give the much-desired boom to the economy."
Another key area of focus for the real estate sector is affordable housing. With the increasing cost of living and rising real estate prices, many people are struggling to find affordable housing options. The government is expected to announce new initiatives and funding for affordable housing projects to make them more accessible to a wider range of people.
Atul Banshal, Director Finance, Omaxe Ltd. said, "The budget should consider reducing stamp duty as that will assist it in resuming a robust real estate market and complete housing for all missions for the Central Government. The government must consider increasing the tax rebate on home mortgage interest from Rs. 2 lakh to at least Rs. 3 lakh. It is also necessary to have separate deductions for principal repayments, which are currently included under Section 80(c). It should also be raised from the current limit of Rs. 1.5 lakhs to Rs. 3 lakhs. Currently, there are no regulations governing brokerage fees; neither the buyer nor the developer is required to pay the required commission on each transaction. Consequently, collecting the existing 18 per cent GST rate on brokerage services falls solely on realtors. Thus, real estate brokerage services must be brought on par with other service providers by lowering the GST rate to a more manageable 5 per cent as this tax cut could encourage more realty agents to join the tax system, benefiting the government's revenue collection."
The sector also expects the government to increase the SWAMIH fund from Rs. 5,000 crore to Rs. 50,000 crore to unlock vast investment opportunities in the residential segment.
"The government should rationalise GST rates for construction materials like steel, cement and tiles. Additionally, the government should put aside more funds under the stress fund SWAMIH. Policies should be relaxed, or scope of policy should be widened so that stuck projects can be completed. Subsidy under the Credit Linked Subsidy Scheme (CLSS) has been a big saving and motivation and should be continued to achieve the "Housing for All" mission. Hence, we look at this scenario with pragmatic optimism and approach the market with a bullish perspective," said Pradeep Aggarwal, Founder and Chairman, Signature Global (India) Ltd.
The realty sector is looking forward to an increase in tax rebates, policy reformation, receiving industry status, and the long-awaited single window clearance.
Abhishek Trehan, Executive Director, Trehan Iris said, "The project financing interest rates should be regulated, which are currently 7-8 per cent above even home loan rates. Therefore, not only the rate of interest be reduced on project financing, but also a real estate-focused government fund should be provisioned for flexible access to capital at a minimal rate of interest. Retail space and mall developers are expecting holistic support from the forthcoming budget. The growth potential of the retail sector can be leveraged only with the help of upgraded infrastructure, better connectivity, and appealing announcements attracting investment. Simultaneously, the upcoming budget should continue to emphasise measures to boost consumer spending and investment."
In addition, the real estate sector is hoping to see increased investment in infrastructure and transportation systems. This can help improve the accessibility and livability of real estate markets, making them more attractive to potential buyers and investors.
"It is critical that the government considers expanding income tax benefits in order to make them more lucrative. We expect the maximum tax rate of 30 per cent should be reduced to 25% to improve the buying power of the individuals and Interest rate saving Cap should be increased from the present 2.5 L to 5 L. We also expect the administration to respond to calls for a single-window clearance system. We are optimistic that the government would shape its policy actions to promote real estate demand even further this year," said Santosh Agarwal, CFO and Executive Director, Alpha Corp.
Overall, the real estate sector is hoping for a budget that will help create new opportunities for investment and growth, and improve the quality of life for millions of citizens. Whether these expectations will be met remains to be seen, but the industry is hopeful that the Union Budget 2023 will provide a much-needed boost to the sector and help it reach new heights.
This story has been provided by NewsVoir. ANI will not be responsible in any way for the content of this article.
✔️ Union Budget 2023 Wishlist for the Real Estate Sector in India
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