Budget 2024-25: Real estate sector expects grant of industry status, increased tax relief, deduction on home loan among others
The real estate industry expects the grant of industry status in the upcoming budget as it would ease availability of funds and increase participation of foreign investors.
![Budget 2024-25: Real estate sector expects grant of industry status, increased tax relief, deduction on home loan among others](https://cdn.zeebiz.com/sites/default/files/2024/07/04/303156-pexels-binyaminmellish-106399.jpg?im=FitAndFill=(1200,900))
Real estate sector plays a pivotal role in the country’s growth and as in the interim budget announcement, the government will continue to push infra development. Likewise, housing, infrastructure development, sustainability and digitization will remain at the core of the budget, which will go a long way in supporting real estate growth across segments in the long term.
So, here are the industry expectations ahead of the Union Budget 2024-25 as the industry looks
at the upcoming budget with optimism, seeking a strategic roadmap that aligns well with evolving needs of stakeholders including end-users developers & investors.
Rationalisation of the capital gains tax structure
Investors and other stakeholders are expecting rationalisation of the capital gains tax structure. In the current regime, long term capital gains on sale of house property is taxed at 20 per cent on the gains accrued.
Incentives for green buildings
Badal Yagnik, Chief Executive Officer, Colliers India is of the view that incentivisation of green buildings through minimum alternate tax or tax breaks similar to the infrastructure sector will be particularly beneficial. EV infrastructure, renewable energy and green financing will continue to remain in focus creating a strong base for a sustainable future, added Yagnik.
Steps to boost retail participation in REITs and InvITs called for
The budget 2024-25 is expected to consider ways for boosting higher retail participation in both REITs and InvITs. Of late SEBI’s measures including reduction in the minimum investment size as well as trading lot has spurred higher retail engagement in these investment instruments.
Deduction in lieu of home loan principal repayment and increasing tax breaks to Rs 5 lakh on interest amount
Amit Goyal, Managing Director, India Sotheby's International Realty emphasising on the industry’s expectations said that one significant measure that has been pending for a long time and would benefit both the industry and home buyers is the introduction of a standalone deduction for home loan principal repayment, along with raising the tax breaks on the interest amounts of home loans from Rs 2 lakh to Rs 5 lakh.
This move would help mitigate the impact of increased home loan EMIs and provide much-needed relief to home buyers, he added.
It is crucial to sustain demand for homes in the real estate sector, as housing acts as an accelerator for over 200 ancillary sectors.
Shrinivas Rao, FRICS, CEO, Vestian said that after the government resumed its third term it had already announced the construction of 3 crore new units under PMAY. This shows the government’s commitment towards the real estate sector. Demand for residential units is expected to increase further, if the government increases tax exemption limits for home loans in the Union Budget 2024-25.
Grant of industry status to real estate sector
Rao added that the grant of industry status to the sector would ease availability of funds and increase participation of foreign investors. Securing industry status will unlock a plethora of legal and administrative benefits, along with much-needed tax incentives, added Shubhi Jain, Principal Partner & Head of CRM, Square Yards.
Realignment of strategics factoring higher construction costs
Also, while the government's focus on affordable housing under PMAY is commendable, recalibrating strategies in light of escalating construction costs is imperative for sustained inclusiveness and effectiveness, added Jain.
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