India’s real estate industry has high expectations from the Finance Minister regarding the upcoming general budget. The industry expects policy measures to address financing, taxation and infrastructure issues which may also significantly benefit middle-class home buyers. The industry feels that if the government takes some special measures in the budget, it can be beneficial for the home buyers as well as the industry. Finance Minister Nirmala Sitharaman will present Budget 2025 on 1 February. Let us know here what measures should be considered by the government.
These 10 steps will provide great relief
- The government needs to increase budgetary allocation for affordable housing and expand loan-linked subsidies to ensure the success of initiatives like Pradhan Mantri Awas Yojana (PMAY-U).
- According to Live Mint news, the industry says that the current GST regime is vague and is a big challenge for developers. It is important to simplify and streamline GST rates to reduce complexities and reduce the financial burden on developers.
- Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) have brought transparency and liquidity to the sector. Reducing dividend distribution tax and providing more incentives for retail investors could increase their adoption.
- Stamp duty rates in some states are currently high, at 8-9 per cent. This is a huge financial burden for home buyers in India. Rationalizing these rates across states for homes up to ₹1.50 crore is essential to make property ownership more affordable and increase demand for homes.
- Rental housing can play an important role in addressing the urban housing shortage and supporting workforce mobility. The government should introduce incentives and policy support for the development of affordable rental housing campuses.
- The industry demands that the real estate sector be given industry status, so that the cost of borrowing can be reduced and there can be better access to institutional loans. This will strengthen the ability of developers to deliver quality projects on time. This will also allow easier access to institutional funding at lower interest rates.
- Real estate stakeholders have urged the government to reconsider the limit of tax deduction under sections 80C and 24(B) of the Income Tax Act. Increasing the limit of deduction for repayment of home loan principal and interest on home loan will improve housing affordability and promote home ownership.
- The real estate sector has always been important in driving India’s GDP growth and generating employment. In such a situation, in view of the increasing interest of NRIs in Indian real estate, specific measures in the budget like reducing the tax burden on property transactions and increasing investment facilities in residential and commercial properties can be very helpful.
- The simple and time-bound approval system will improve ease of doing business, enabling developers to complete projects on time and reduce costs. Emphasis is expected to be on single window clearance system for approvals, reduction in compliance burden and attracting domestic and foreign investment.
- Policies to attract foreign direct investment (FDI) in real estate can further strengthen the sector. Simplifying the regulatory framework and providing tax incentives for global investors will help further establish India as an attractive destination for international capital.
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