Budget 2022 Pick: From higher allocations to tax exemptions, analysts list measures that could help realty sector to bloom

Ahead of the biggest financial event of a year, a speculation of massive boost likely for realty sector is doing the rounds. From housing loan interest rebate to road construction, most of the analysts believe the government in Budget 2022 may make huge announcements with respect to this sector. 

With an expectation that the government may go big for infrastructure segment, Nirmal Bang, a brokerage house expects “Increase in the limit of home loan interest for tax rebate from Rs 2 lakhs to Rs 5 lakhs and reduction in the tax rate on capital gains in the upcoming budget.” 

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This is in line with the Indian Bank Chief Sunil Mehta’s expectations to increase the tax rebate for housing loan interests from Rs 2 to Rs 5 lakh rupees, as it would eventually help the realty as well as the banking sector and indirectly may contribute to India’s growth story. 

“Higher allocation towards infra and housing development by introducing various amendments such as increase in the tax-deductible limit for repayment of housing loan principal, relaxation, extensions of tax concessions to the households, which will be useful for realizing the Prime Minister’s dream of housing for all,” the domestic brokerage house also said in its expectations for the sector. 

Besides, “Tax exemption on investments in real estate investment trusts (REITs) with a starting investment of Rs 50,000; Tax neutral consolidation of business through mergers for stalled projects,” Nirmal Bang also highlighted in its list of expectations. 

Moreover, it says that GST waiver for under-construction properties and incentives for private investment in the housing sector may boost the overall realty segment. 

Urging the government to increase the ambit of affordable homes value, the brokerage mentions, “In metro cities, the same limit should be raised to Rs 1.5 crore from Rs 75 lakh and the size of apartments under affordable housing should be increased to 90sqm in metros from the current 60sqm; and to 120sqm in non-metros from 90sqm.” 

Meanwhile, a rating agency ICRA also in its Budget 2022 expectations says that the expansion of income tax benefits for housing loans can improve affordability; similarly, enhanced budgetary allocations for housing schemes such as Pradhan Mantri Awas Yojana (PMAY). 

As well as the augment credit availability for stuck projects, such as that done through the SWAMIH fund and thrust on unlocking land bank with PSUs and Government agencies, will aid the real estate sector most and eventually to country’s economy, the rating agency added.