Budget 2024 expectations: Perks for first-time homebuyers, tax sops, industry status top real estate players’ wish list

Budget 2024 expectations: With Budget 2024-25 only days away, top real estate players lay stress on increased tax slabs and revised affordability caps in their wishlist. They also advocated for incentives, anticipating a budget that addresses critical challenges, stimulates demand, and aligns with the government's vision of sustainable growth. The sectoral leaders called for the expansion of the SWAMIH (Special Window for Affordable and Mid-Income Housing) stress fund and the creation of a second tranche aimed at completing stalled projects and ensuring liquidity. Additionally, they called for tax reliefs for first-time homebuyers and the reintroduction of GST with an input tax credit on under-construction properties to stimulate demand.

Sandeep Runwal, President of NAREDCO Maharashtra, emphasised the real estate industry's anticipation of transformative changes in the upcoming Budget 2024-25. He highlighted the sector's pivotal role in the economy and its significant employment contribution. Acknowledging past reforms, Runwal called for an increase in the interest rate deduction cap to ₹5 lakh and a redefinition of affordable housing, particularly in metro cities.

He also called for continued incentives for affordable rental housing, tax benefits for first-time homebuyers, and the reintroduction of GST with an input tax credit. Additional proposals encompassing tax reliefs, single window clearance, reduced home loan interest rates, and the revival of subvention schemes for homebuyers.

Runwal also advocated for an augmented SWAMIH stress fund, a second tranche with a corpus of ₹50,000 for stalled projects, and the long-awaited granting of 'industry status' to the real estate sector.

The budget should raise the cap on affordable housing from ₹45 lakh to ₹65 lakh, making incentives more accessible, according to Saurabh Garg, Co-founder & Chief Business Officer, NoBroker.com. A revision in Section 24 of the Income Tax Act is sought to increase the tax rebate on home loan interest rates from ₹2 lakh to at least ₹5 lakh. To boost real estate investment, suggestions include reducing the long-term capital gains tax on property from 20% to 10% and streamlining processes for Real Estate Investment Trusts (REITs).

“Under the current HRA classification, employees residing in recognized metro cities such as Delhi, Mumbai, Kolkata, and Chennai are eligible for an HRA of 50% of their basic salary. But those residing in non-metro cities receive a reduced allowance of 40% of their basic salary. This classification fails to include major cities like Bangalore and Hyderabad, where rentals are extremely high. Therefore, we are anticipating that the upcoming budget will address this discrepancy and reassess the classification of cities,” Garg added.

Addressing metro city property rates, Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Vice President, of CREDAI-MCHI 2023, said, “With property prices in metro cities skyrocketing, the industry advocates for a revision of the cap in the credit link subsidy scheme. Raising the limit from ₹45 lakh to ₹1 crore for metro city home buyers will significantly benefit the affordable housing segment, making homes more accessible.”

"We support the industry-wide call for granting "industry status" to the residential sector, aligning with the government's vision of "housing for all." Additionally, supportive measures, including NAREDCO's appeal for a ₹50,000-crore fund, will also align with the government's vision of "housing for all" and could significantly fortify the sector's trajectory. The budget is a chance to redefine affordability as the diverse locations demand different price caps instead of uniformity. Recognising changing investment dynamics, we suggest expanding Section 80C limits for millennials and Gen-Z homebuyers,” Venkatesh Gopalakrishnan, Director Group Promoter’s Office, MD & CEO - Shapoorji Pallonji Real Estate, said.