As the Union Budget Announcement draws closer, more and more India Inc. leaders in the Real Estate sector shared their pre-budget expectations with Team Estrade. More readings on India Inc.’s Union Budget 2023 expectations can be found here.
More Pre Budget views can be read here as well.
Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Treasurer, CREDAI-MCHI
The year 2022 saw an amazing revival of the real estate sector with excellent property sales being recorded across housing segments. The industry hopes to continue with the same tempo in the year 2023 as well.
We look forward to the Finance Minister granting industry demand of increasing the tax slab upto Rs. 5 lakh from present Rs 2 lakh per annum, against interest rate deduction under section 24(b) of the Act.
Property rates in metro cities are very high and out of reach for most home buyers in the lower property segment. Revising the cap from 45 lakh to 1 crore in metro cities, for home buyers availing the credit link subsidy scheme will immensely benefit customers in the affordable housing category and make housing more accessible to them.
The Government should introduce tax sops for first-time homebuyers and re-introducing GST with an input tax credit on under-construction properties that will reduce property rates thereby generating demand among homebuyers.
The government should consider expanding the SWAMIH Fund which will not only ensure completion of stressed projects but will also broaden the scope across property segments and assist developers of stressed projects in delivering them on time too; to the home buyer. This will ultimately boost the confidence of the homebuyers.
The real estate sector is looking at continuation of a robust housing demand in 2023 and developers expect the government to play a more constructive and supportive role. A robust housing sector will complement infrastructure development and will be a catalyst to the growth of the economy as well.
Navin Makhija – Managing Director, The Wadhwa Group
The Government has shown adequate support by bringing in reforms in policies and announced some slew of relief measures to revive the economy in the past two years of pandemic. A lot is expected from the upcoming budget that will give a further boost to accelerate the economy from where we are today and we strongly believe that the Government will take appropriate and necessary measures to spur consumer demand.
Since with the inflation and the loan interest rates are moving upwards, more tax sops and higher relief on the home loan rates will woo the homebuyers and investors to buy Real Estate. Irrespective of whether it is the first home or the second home, without an upper cap all the interests that the customer pays for the home loan should get a tax break.
This will encourage the home buyers and investors to continue looking at Real Estate as an asset class and in return infuse liquidity into the Real Estate sector and also help banks who were sitting on excessive liquidity to utilize their money in the right direction.
Also, the income tax benefit for housing should not only be for residential purchasers alone rather it should also be extended towards commercial purchasers as well. This can help the sector recover from its liquidity woes to a larger extent. We would also like to revive the input tax credit under the GST reforms which will help to keep the property prices under control instead of developers generally passes it on to a buyer.
The capping of Rs 45 lakh applicable for an affordable house should be extended to 60 lakhs. This would expand the benefits of affordable housing schemes to more home buyers and therefore boost the end-user demand. While incentives have been provided to boost the affordable housing segment, there needs to be a reduction in the cost of land, development premiums and tax, sops including lower intra rate to incentivize developers to build budget homes.
Since the high cost of land is another major constraint faced by the sector, steps taken by the government to unlock the value of land parcels held by government agencies / PSUs through partnerships with affordable housing developers can be a significant step. Such initiatives can also help the government to improve its revenue generation capability.
The Government also needs to allocate more funds for Pradhan Mantri Awas Yojana (PMAY) which will help them achieve the target of ‘Housing for All’. Industry status for the sector and single window clearance for projects has been a long- standing demand which we expect the Government to address.
Apart from this, we are expecting a more determined infrastructure push from the Government not only in the form of more funds but with strict guidelines on actual infra deployment. This will certainly boost the real estate sector and also generate more jobs that the Government has committed to deploy.
We anticipate the Government to announce incentives that will propel the growth of the sector such as introducing tax breaks which will increase public spending, less transaction cost, etc.
Sachin Chopda, Managing Director, Pushpam Group
We call upon the government to incentivise first and second home purchases with adequate tax breaks. This would broaden the scope of the home buyer base, bringing in much needed liquidity into the sector. Interest rates on home loans are on the rise; this is a dampener to the housing sector and property sales.
Additional tax sops and other benefits should be offered to home buyers in order to make home buying more attractive and improve property sales. We wholeheartedly welcome the efforts of the government in promoting affordable housing across the country. In line with this policy, the government needs to consider increasing the cap of Rs. 2 lakh per annum to at least Rs. 5 lakh against interest rate deduction under section 24(b) of the Act.
This will be a big relief to home buyers in the affordable property segment. Additionally, removing or increasing the 45 lakh cap in the affordable housing segment for metro cities would be advisable. This considering that construction costs and other allied materials are rising and so is the cost of buying a home.
The government should revise the cap up to Rs. 1 crore in the metro cities for first time home buyers in the affordable housing category to those availing credit link subsidy scheme benefits. We expect the government to announce tax reliefs for rental housing projects, attracting large investments in these schemes; thereby promoting rental housing in India.
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