NEW DELHI: The real estate industry has high hopes from the Union Budget 2024 as it expects the budget to boost the affordable housing segment, which is facing inflationary pressure. The industry is eagerly anticipating Finance Minister Nirmala Sitharaman on February 1 to announce supportive measures, the most prominent being increasing the deduction for home loans (u/s 24).
“The proposal to increase the qualifying cost for affordable properties and release government-owned lands at reduced rates aligns with inclusive growth objectives. Crucially, the push to raise the tax deduction limit on home loans from R2 lakh to R5 lakh aims to rejuvenate the budget housing segment amidst recent interest rate hikes,” said Avneesh Sood, Director Eros Group. Anuj Puri, Chairman of Anarock Group, said increasing the rebate to at least R5 lakh can stimulate a more robust market for housing, particularly in the budget homes segment, which has seen a decline in demand since the pandemic.
Puri added that the industry’s outlook for 2024 is positive, but the results of the upcoming general elections will have a significant impact on the demand for and growth in residential real estate. Puri said that several interest stimulants that were offered to developers and consumers in this market over the years have expired in the last one to two years and now it is imperative to revive and extend significant benefits, such as tax breaks, to encourage developers to construct more affordable housing and to make it possible for customers to acquire such homes.
National Real Estate Development Council (NAREDCO) National President G Hari Babu said NAREDCO has submitted a representation to the finance ministry seeking “Micro, Small and Medium Enterprises (MSME) status” for small builders and introduction of a scheme for those earning salaries up to R40,000 per month. Property developers are also seeking a GST rate cut on construction material.