A key expectation is implementation of incentives aimed at bolstering affordable housing initiatives
MUMBAI: The real estate sector in India is currently at a crucial juncture, with the government’s ambitious target of providing “Housing for All” by 2022 driving significant developments within the industry.
As the Government of India prepares to announce its annual budget, all eyes are on the real estate sector, a vital component of the country’s economy, to see what measures will be introduced to boost affordable housing.
A key expectation from the upcoming budget is the implementation of incentives aimed at bolstering affordable housing initiatives. While progress has been made towards the goal of universal housing provision, there remains a significant gap that needs to be addressed. Industry leaders and stakeholders are calling for a comprehensive revamp of tax policies to enhance competitiveness and efficiency across both corporate and individual tax frameworks.
Affordable housing options
Dr. Niranjan Hiranandani, Chairman of NAREDCO, highlighted several key proposals that could help make housing more affordable, such as raising the limit of interest deduction on home loans and aligning long-term capital gains tax on property with that of equity shares. These measures, if implemented, could provide a much-needed boost to both homebuyers and developers.
Furthermore, there is a growing demand for the rationalisation of the Goods and Services Tax (GST) on under-construction properties, as well as the introduction of a single-window clearance system for real estate projects. Such reforms could streamline processes and reduce costs, ultimately benefiting both consumers and industry players.
Manju Yagnik, Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO-Maharashtra, emphasised the need for increased allocations and incentives under the Pradhan Mantri Awas Yojana (PMAY) to enhance affordable housing options for economically weaker sections and low-income groups.
“Simplifying GST rates for under-construction properties and reducing stamp duty rates are also seen as crucial steps to stimulate housing demand and make homes more accessible.”
Boost FDI inflows
In addition to tax reforms and increased incentives, industry experts are calling for measures to attract capital investments and boost foreign direct investment (FDI) inflows into the country.
Venkatesh Gopalakrishnan, Director at Shapoorji Pallonji Real Estate, underscored the importance of infrastructure projects in driving the sector forward and urged the government to continue supporting such initiatives.
Dharmendra Raichura, VP Finance at Ashar Group, highlighted the importance of granting ‘Industry’ status to the real estate sector to facilitate easier financing for developers. He also suggested releasing government-owned lands at reduced costs in metropolitan and semi-metropolitan areas to address land shortages and make housing more affordable.
Domnic Romell, President of CREDAI-MCHI, said the need to exempt GST on redevelopment projects in Mumbai, where a significant portion of real estate projects are focused on redevelopment. This move could lead to safer, better, and more affordable housing options for the city’s residents.
