As Finance Minister Nirmala Sitharaman gears up to present the first budget in Prime Minister Narendra Modi's third term, the real estate sector is brimming with expectations for policies that will propel growth and stability. Key stakeholders from across the sector have outlined key areas they believe the government should prioritise in the upcoming budget.

Mr. Prashant Sharma, President of NAREDCO Maharashtra, emphasises several expectations for the budget that could significantly boost the real estate sector's growth and sustainability. Enhancing tax benefits for homebuyers under Sections 80C and 24(b) and increasing the home loan interest deduction limit would make homeownership more attractive and affordable. Implementing a single window clearance system for real estate projects would streamline approvals, reducing delays and costs. He also calls for extended benefits under the Pradhan Mantri Awas Yojana (PMAY) and additional incentives for affordable housing projects, suggesting a redefinition of affordable housing to increase the cap from INR 45 lakh to INR 1 crore in metro cities. To address liquidity challenges, Mr. Sharma advocates for measures that improve financing access for developers, especially SMEs, and calls for an increased SWAMIH stress fund with a second tranche of INR 50,000 crore for completing stalled projects. Simplifying land acquisition processes and reducing associated costs are essential for encouraging new projects. Policies promoting rental housing and incentives for developers to build rental projects would address urban housing needs. Emphasising digital transformation, he supports incentives for adopting PropTech solutions to enhance transparency and efficiency in the sector. These measures, if incorporated in the budget, would revitalise the real estate sector and contribute significantly to the country's economic growth.

Mr. Pritam Chivukula, Co-Founder and Director of Tridhaatu Realty and Vice President of CREDAI-MCHI, outlines key expectations from the forthcoming budget. Increasing the limit of tax deductions under Section 24(b) for home loan interest from the current INR 2 lakh to INR 5 lakh will provide a significant impetus to homebuyers, enhancing affordability and stimulating demand in the residential segment. The implementation of a single-window clearance mechanism is crucial for expediting project approvals and reducing bureaucratic delays, enabling faster project execution, ensuring timely delivery, and boosting investor confidence. Further incentives for affordable housing projects, such as extended tax holidays and increased allocation under the Pradhan Mantri Awas Yojana (PMAY), will be instrumental in achieving the government?s vision of ?Housing for All,? addressing the housing deficit in urban and rural areas. The real estate sector urges the government to rationalise the GST rates on under-construction properties and ensure that Input Tax Credit (ITC) benefits are passed on to the developers. A reduced and simplified GST structure will encourage more homebuyers to invest in under-construction properties. Granting infrastructure status to the real estate sector will facilitate easier access to funding at lower interest rates, reducing the cost of capital for developers and accelerating the pace of infrastructure development, leading to overall economic growth.

Mr. Vedanshu Kedia, Director of Prescon Group, identifies key areas the government should address for real estate sector growth. The current GST structure needs revision to allow input tax credit for developers, helping manage cash flows, rationalise prices, and make properties more affordable. Simplifying GST rates and making them more affordable is also crucial. Revising capital gains taxation is essential, including reducing the holding period for long-term gains from 24 to 12 months and increasing exemption limits under Sections 54 and 54EC. Enhanced infrastructure improves connectivity and property values, so the government should allocate substantial funds for development and enable infrastructure financiers with reduced capital reserve ratios. Attracting more NRI investments by simplifying regulations, providing tax benefits, and ensuring a hassle-free repatriation process will also boost the sector. Millennials, who form 36% of the population and accounted for 54% of homebuyers in 2023, are increasingly looking to invest in real estate. The government should introduce incentives like reduced stamp duty, lower interest rates on home loans, and tax benefits for first-time homebuyers. For the ageing population, the government should provide incentives for senior-friendly housing projects, including tax benefits, subsidies, or grants for developers focusing on inclusive and accessible housing for senior citizens.

Mr. Samyak Jain, Director of Siddha Group, emphasises the importance of additional support to sustain the upward trajectory from the upcoming budget. This includes tax benefits, easier access to credit, and measures to improve liquidity in the market. Millennials represent a substantial portion of potential homebuyers today. However, increasing property prices and stringent financing options often make homeownership a distant dream for many. The government should introduce targeted schemes that cater specifically to millennials and first-time homebuyers, making homeownership more accessible to this demographic and injecting fresh demand into the housing market. There is also a pressing call for increased budgetary allocation towards infrastructure development in cities like Mumbai.

Ms. Shraddha Kedia-Agarwal, Director of Transcon Developers, emphasises that the real estate sector has always been a cornerstone of the Indian economy, driving growth and employment. Anticipated policies should provide a substantial stimulus to the housing market, such as tax benefits for homebuyers and reduction in GST rates for under-construction properties. Foreign Direct Investment (FDI) plays a crucial role in the development of infrastructure and real estate. Simplifying the FDI process and making it more attractive for foreign investors can enhance transparency and ease regulatory compliances, bringing in much-needed capital and supporting large-scale developments. NRIs form a significant part of the real estate investment community. Policies that make it easier for NRIs to invest in Indian real estate, such as streamlined processes for property purchases, attractive loan schemes, and tax incentives, can drive growth in the sector.

Mr. Rohan Khatau, Director of CCI Projects, stresses the importance of addressing the real estate sector?s needs and expectations comprehensively to ensure sustainable growth and development. One of the pivotal aspects that can stimulate demand in the real estate sector is enhancing the tax deduction limit on home loan interest. Increasing this limit from INR 2 lakhs to INR 5 lakhs under Section 24(b) would significantly alleviate the financial burden on homebuyers, encouraging more individuals to invest in housing. Investment in social infrastructure not only improves the quality of life for residents but also enhances the attractiveness of a region, driving real estate demand. Simplifying FDI norms and providing tax incentives to investors can attract both domestic and international investments, making the sector more appealing.

Mr. Himanshu Jain, VP of Sales, Marketing, and CRM at Satellite Developers Private Limited (SDPL), expresses high hopes for continued government support in key areas that drive the growth and sustainability of the real estate sector. The government's commitment to "Housing for All" is commendable, and further emphasis on affordable housing initiatives is anticipated. Strengthening policies and providing additional incentives to developers engaged in affordable housing projects will ensure that more citizens can achieve their dream of homeownership. Metro cities, particularly Mumbai, face unique challenges due to high land and construction costs. Special schemes and subsidies tailored for affordable housing in metropolitan regions can significantly bridge the gap between demand and supply. Enabling a higher flow of funds through banking and non-banking financial institutions, along with targeted measures to support the liquidity of developers, will sustain project momentum.

The real estate sector eagerly awaits the Union Budget 2024-25, hoping for comprehensive measures that will address its key challenges and foster growth. With targeted policies and incentives, the government can ensure that the sector continues to thrive, contributing significantly to the nation's economic development and housing needs.