Real Estate Potential: Budget 2024 Wish List

As Budget 2024 draws near, the real estate sector is expressing its hopes for measures that can boost growth and address challenges. Key wishes include redefining affordable housing, increasing tax exemptions for homebuyers, granting infrastructure status to real estate, and encouraging more people to invest in Real Estate Investment Trusts (REITs). Let's explore these wishes and understand how they could shape the real estate scene.

On the tax front, groups like CREDAI want the government to raise the limit on tax exemptions for the principal and interest on home loans. They propose a separate exemption for the principal repayment of housing loans, suggesting an increase from the current ₹1.5 lakh limit. Colliers India supports this idea by recommending an extension of the limit for interest repayment on home loans, making homes more affordable for buyers.

Another wish is to redefine affordable housing. The current cap of ₹45 lakh, set in 2017, doesn't match today's reality with inflation and rising real estate prices. CREDAI suggests redefining affordable housing to include units with a 90 square meter RERA carpet area in metro cities and 120 square meters in non-metro areas, without setting a cap on the unit's cost.

Getting 'infrastructure' status for the real estate sector is also a big ask. This status would make it easier for developers to get loans, reducing their borrowing costs. Additionally, the industry wants to get more people involved in REITs. To achieve this, proposals include aligning REITs with listed equity shares, amending the CGST Act to allow input credit during the construction phase, and bringing back a 100% tax holiday for affordable housing projects under Section 80IBA.

With the Housing for All initiative reaching its final stage, stakeholders hope for incentives and subsidies to fuel affordable housing projects. Tax breaks for developers focusing on affordable housing could lead to more homes in both urban and rural areas.

As we await Budget 2024, these proposals aim to unlock the potential of the real estate sector, boost economic activity, and shape the future of real estate in India. Stay tuned for the budget announcement, as it holds the key to the future of real estate in the country.