Key Expectations from the Real Estate Sector for the 2024-25 Budget:
Aneesh Jain, CEO & Founder, Gram Unnati
“Most schemes to enhance productivity, improve price realization and ensure sustainability are already there in place. However, each of these schemes alone will not be able to move the needle. What is required now is for the states, districts, and blocks to develop production clusters where all of these schemes converge. This will help farmers to experience the grand impact of the vision under which these schemes were envisaged. The upcoming budget should focus on setting up these integrated pilots.”
Mr. Samyak Jain, Director, Siddha Group
“In anticipation of the 2024-25 budget, there is a growing sentiment of optimism within the real estate sector, which is expected to be a significant benefactor of the new fiscal policies. After a year of remarkable performance, the industry emphasizes the need for additional support to maintain this growth trajectory.
A key focus is on enhancing the access of first-time homebuyers to affordable housing, particularly in metropolitan cities. The industry is hopeful for an upward revision of the cap in the credit link subsidy scheme, along with the introduction of tax benefits for first-time homebuyers. Such measures are seen as pivotal in sustaining the sector’s momentum.
The Government’s efforts in promoting affordable housing have been acknowledged and appreciated. However, there is a need for further enhancements.
Moreover, increased budget allocation towards infrastructure development in Mumbai is also required. Improved infrastructure is expected not only to enhance connectivity and ease travel for residents but also to trigger a surge in housing demand across the city.
The sector also recognizes the shifting demographics, with a constant influx of people from smaller cities into metropolitan regions. This demographic change escalates housing demands, necessitating timely government intervention to capitalize on the projected upward trend in the real estate sector. The forthcoming budget is viewed as a crucial opportunity to address these needs and propel the industry towards sustained growth.”
Mr. Rohan Khatau, Director, CCI Projects Private Limited
“As the Union Budget 2024-25 looms on the horizon, the real estate industry remains hopeful for continued support. This support is not just seen as a boon for the sector but as a catalyst for the broader national economy. Mentioned below are several key expectations from the upcoming budget that have been outlined:
- Tax Deduction Limit Increase: A major expectation is an increase in the tax deduction limit on home loan interest from the current Rs. 2 lacs to Rs. 5 lacs. This move is aimed at attracting a wider range of homebuyers, particularly those buying a home for the first time, by offering them significant tax relief.
- Affordable Housing Price Cap Adjustment: Another critical demand is to raise the price cap of affordable housing from the existing Rs. 45 lacs. This revision is especially relevant in metropolitan areas where constructing houses below the current cap is challenging due to the high costs of land and construction.
- Industry Status Recognition: The sector’s long-standing request for recognition as an ‘Industry’ remains a focal point. This status could enable the sector to attract equity investments, restructure debts, and secure loans at more favorable interest rates.
- Investment in Green and Traditional Infrastructure: Lastly, there is a strong emphasis on increasing investments in both green infrastructure, like renewable energy, and traditional infrastructure, such as roads, railways, and ports. These investments are seen as crucial for the growth of both the real estate sector and the overall economy.
In summary, the real estate sector, bolstered by previous government initiatives, looks towards the Union Budget 2024-25 with optimism, hoping for measures that will sustain its growth and contribute positively to the nation’s economic fabric.”
Mr. Pritam Chivukula, Co-Founder & Director of Tridhaatu Realty and Vice President of CREDAI-MCHI
“2023: A Year of Remarkable Growth
The real estate sector experienced a significant surge in 2023, recording exceptional property sales across various housing segments. Optimism runs high as the industry anticipates maintaining this momentum into 2024 as well.
Expectations from the Finance Ministry
A key aspiration for the coming year is the Finance Minister’s response to the industry’s request to increase the tax slab to Rs. 5 lahks per annum for interest rate deduction under section 24(b) of the Act, up from the current Rs 2 lakh.
Addressing Metro City Property Rates
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 Rs. 45 lakh to Rs. 1 crore for metro city home buyers will significantly benefit the affordable housing segment, making homes more accessible.
Incentives for First-Time Homebuyers and GST Revisions
The industry urges the Government to introduce tax benefits for first-time homebuyers and reconsider the implementation of GST with an input tax credit on under-construction properties. Such measures are expected to lower property rates and stimulate demand.
Expanding the SWAMIH Fund
An expansion of the SWAMIH Fund is proposed to ensure the timely completion of stressed projects. This will not only assist developers but also reinforce homebuyer confidence by delivering projects on schedule.
Outlook for 2024: A Robust Housing Demand
The real estate sector is gearing up for another year of robust housing demand. Developers are hopeful for increased government support, believing that a thriving housing sector will play a crucial role in the overall economic growth and infrastructure development.”
Mr. Himanshu Jain, VP – Sales, Marketing & CRM, Satellite Developers Private Limited (SDPL)
“Following agriculture, the real estate sector stands as the second largest employer in India, contributing significantly to the nation’s economy with approximately 9-10% of the total Gross Domestic Product (GDP). Acknowledging its vital role, both the Central and State Governments have been actively implementing measures to fortify this sector. Among the most pressing agendas is the mission to make affordable housing universally accessible, a priority echoed in the expectations for the upcoming Union budget.
The industry is appealing for a robust government package aimed at alleviating the severe demand shortage. Their proposal includes relief measures for homebuyers, particularly in the pricing domain, to stimulate the market.
Key Proposals include:
Increase Tax Rebate Slabs: Enhancing tax benefits for homebuyers
Boost Consumption: Encouraging home-buying activities
Social Infrastructure Development: To attract more buyers
Employment and Job Creation: Enhancing buying capacity
Realizing the ‘Housing for All’ Dream: Making affordable housing a reality
The Government’s initial steps, notably the Pradhan Mantri Awas Yojana (PMAY), were directed at addressing the acute housing shortage, which has led to the proliferation of slums and shanties in urban and semi-urban areas. Presently, the Centre is considering proposals to reduce the costs of under-construction properties. This initiative aims to ensure developers pass on the benefits of input tax credits to homebuyers, a practice that has seen limited compliance despite governmental appeals.
The upcoming budget session is particularly significant, with the real estate sector keenly anticipating measures that will offer relief to potential homebuyers, especially in metropolitan cities like Mumbai.”
Mrinaal Mittal, Director, Unity Group
“The sentiment prevalent in the real estate sector in 2024 is propitious after having witnessed an extraordinary growth spurt in 2023, notwithstanding various quandaries like lofty rates of interest. The verdict of the next general elections will vastly shape the demand drive and growth rate in residential real estate. Every year, prior to the budget announcement, the real estate industry expresses its expectations from the Finance Ministry. The agenda remains rather consistent with a few basic demands, which also include fast-tracking the resolution of issues in the real estate sector. Additionally, one of the key asks from this budget would be an increase in the tax rebate slab on home loan interest rates to at least twice what it is presently. Affordable housing will need encouragement in the form of tax holidays to persuade developers to launch such housing projects as schemes introduced during and after the pandemic has expired. As a contributor of about 7.5% to the country’s GDP, our industry is justified in expecting a serious consideration of regulations that will augment the robustness of last year.”
Hari Kishan Movva, Senior Vice President, SILA
“To stimulate the housing market, it’s crucial to increase the Income Tax Act Section 24’s home loan interest rate rebate from INR 2 lakh to at least INR 5 lakh. This adjustment could particularly benefit budget homes, facing a 20% decline in sales in 2023 due to the pandemic.
Reviving expired incentives, like tax breaks, is imperative for affordable housing. Modify eligibility criteria, considering the Ministry’s definition based on income, property size, and price. Adjust the qualifying cost for city properties; for instance, raise the budget to INR 85 lakh for Mumbai. This ensures broader accessibility and utilization of government subsidies and reduced GST rates.
Address the land shortage by releasing government-owned lands for affordable housing. Lands owned by entities like Indian Railways could significantly lower real estate prices when allocated specifically for this purpose.”
Kaushal Mehta, Managing Director, Walplast
“As we step into 2024, the construction materials industry anticipates a year of robust growth with a strong tailwind. The sector, pivotal for infrastructure development, envisions a positive trajectory bolstered by technological advancements, sustainable practices, and a renewed focus on efficiency. As we eagerly await Budget 2024, our expectations center around supportive policies that foster innovation, development, sustainability, and affordability. A far-sighted budget allocation in an election year can serve as a catalyst for the industry’s growth engine, driving job creation and economic prosperity. Embracing the challenges ahead, the construction materials sector is poised for a transformative year, contributing significantly to the nation’s progress and reinforcing its role as a cornerstone of sustainable development.”
Henna Misri, Chief Executive Officer, Space Creattors Heights
“From formidable office settings in austere colors to lively, colorful, and quirky offices, the coworking industry changed the way we work. From catering to mostly startups and freelancers to having mammoth corporate clients, Flexi offices witnessed a metamorphosis that was further propelled by the pandemic. Over the next three to five years, it is foreseen that the coworking sector, which presently makes up roughly 18% of all commercial real estate utilization in India, will achieve a proliferation rate of 25 to 30%. For an industry growing so rapidly, we are seeking some support and encouragement from the upcoming budget. These essentially include positive tax reforms to support the expansion of our footprint, along with lowering GST rates and clearer standards on electricity tariffs. The creation of a single-window clearance system and a major impetus to infrastructure will also accelerate the entry and operation of coworking spaces in non-metropolitan areas, which is the next step in the progression of the co-working and flexible office spaces.”
Aryann Suri, Director Sales & Operations, Space Creattors Heights
“According to a recent study, coworking spaces accounted for 27% of the net assimilation of 8.2 million square feet among the top seven to eight cities in Q1 2023. The flexi office industry is growing by leaps and bounds and is here to stay. Owing to its flexible work tenets and equitable pricing alternatives, coworking spaces continue to be in high demand, and the flexible coworking business is more vital now than ever before. Several corporates and large businesses have also switched to coworking spaces, as Sandeep has accepted the hybrid work style to meet their organizational needs. Despite a metamorphic rise our industry is a developing one in all fairness and hence seeks some latitude from the Budget 2024. A lower goods and services tax (GST) will appreciably help the coworking industry augment its market presence by attracting smaller players and subsequently grow the revenue collection to the Government. Moreover, a reduction in the TDS, which is at 10% currently, will help the key stakeholders to offer assets at better prices to their clients.”
Vipin Suree, Founder & Managing Director, Space Creattors Heights
“For an industry that contributes 7 – 8 % to the country’s GDP and begets employment only second to agriculture, real estate is a relatively less appreciated and recognized industry. Our sector crested and corroborated a staggering growth rate in 2023 wherein the key property markets indexed an annual growth of 5%, in spite of contentions like record high-interest rates and surge in listing prices. We are bullish and expect to see the upswing in demand continue throughout 2024, but there is an expectation of some tangible support from the Finance Ministry. The Government must provide momentum and succor to stimulate buying further, thereby encouraging the buyers. Furthermore, through the new budget, the Government has to undertake cogent steps to boost demand and address regulatory obstacles. A single window clearance, tax reliefs, and GST rationalization are some of the unmistakable measures that need to be initiated apart from granting real estate the industry status it has long deserved.”
Mr. Sandeep Runwal, President, NAREDCO Maharashtra
“The real estate industry, a vital contributor to the economy and the second-largest employment generator, is poised on the brink of potentially transformative changes. The sector eagerly anticipates the 2024-25 budget announcements, which are expected to influence its future significantly.
In the previous year, the Central and State governments implemented a series of reforms and incentives to rejuvenate the economy. These efforts have been instrumental in sustaining the growth momentum of the real estate sector.
A major focal point for the Government continues to be affordable housing. We suggest an increase in the cap for interest rate deduction under section 24(b) from Rs. 2 lakh to Rs. 5 lakh per annum. Additionally, there’s a call to redefine the definition of affordable housing, proposing an increase in the cap from Rs. 45 lakh to Rs. 1 crore, particularly in metro cities. This change is expected to boost both affordable and mid-segment housing significantly.
The industry also anticipates the continuation of incentives for affordable rental housing schemes. Tax reliefs for such projects could accelerate investment and aid in achieving the Government’s ambitious ‘Housing for All’ goal. Further expectations include tax benefits for first-time homebuyers and the re-introduction of GST with an input tax credit on under-construction properties. These measures are anticipated to stimulate demand among homebuyers.
Other suggestions include tax reliefs to fuel significant growth in the real estate sector, single window clearance, and reduced home loan interest rates. The reintroduction of subvention schemes is also on the wish list, which would assist homebuyers in aligning their payments and encourage home buying decisions.
There’s a call for an increase in the SWAMIH stress fund and the creation of a second tranche with a corpus of ₹50,000 aimed at completing stalled realty projects and ensuring adequate liquidity.
A long-standing demand of the sector has been the granting of ‘industry status’ to real estate. This year, there is a hopeful anticipation that the Government will address this issue.
In summary, the real estate sector expects the Government to take decisive actions in the upcoming budget to fortify not only the real estate market but the entire economy. These measures should aim at addressing critical issues, ensuring job creation, and sustaining growth momentum.”
Mr. Aakash Patel, Director, Atul Projects India Pvt. Ltd.
“In 2023, the Indian real estate landscape, encompassing both housing and commercial sectors, experienced significant growth. This upswing, driven by heightened demand, supply, and absorption rates, places the industry at the forefront of expectations from the upcoming budget, with hopes to sustain this positive momentum.
The Indian government’s strategic reforms, aimed at revitalizing the economy, have infused the market with liquidity, showing promising long-term economic benefits. These measures have painted an optimistic picture of India’s economic prospects in the years ahead.
However, the expiry of several incentives for developers and consumers in the past one to two years has highlighted the need for renewed and extended benefits. Critical measures, such as tax breaks for affordable housing development and acquisition, are seen as crucial for the sector’s continued vitality.
The forthcoming budget is also poised to play a pivotal role in attracting foreign investments. Given the current performance of the rupee, it presents an opportune moment for reforms targeted at foreign capital inflows, including anticipated reductions in interest income tax and liberalization of foreign investment norms in the real estate sector.
The residential real estate market in India has become increasingly appealing to Non-Resident Indians (NRIs), thanks to improved transparency from the Real Estate Regulation and Development Act (RERA) and relaxed investment norms. NRIs are looking forward to the budget, hoping for incentives such as easier tax compliance and reduced withholding tax rates.
Additionally, the commercial and retail real estate segments have gained momentum this year thanks to increased investor and developer sentiment. The focus on Real Estate Investment Trusts (REITs) highlights this growth, offering better cash flow visibility for developers and funders. The global rise of REITs, along with India’s burgeoning REIT market, indicates a bright future for the nation’s commercial real estate sector. The government’s efforts to enhance liquidity and bolster investor confidence in REITs are eagerly anticipated.
As a major driver of the Indian economy, the real estate sector stands at a crucial juncture. The government is expected to announce measures in the upcoming budget that will not only attract foreign investments but also contribute significantly to job creation, further cementing the sector’s role in India’s economic expansion.”
