Expectations From The Budget 2024: Real Estate Sector’s Wishlist

Market investors predict a balanced approach that upholds fiscal responsibility while promoting development across key industries as we come closer to the Union Budget 2024. The real estate industry must be given "Industry status" in the Modi 3.0 budget 2024 as it develops with cutting-edge technology and customised infrastructure. The primary concerns confronting the real estate sector should be addressed by this budget, particularly the tax breaks for homebuyers and the extension of the home loan interest deduction. The proposal about the input tax credit under the GST is one of its most important features; it is essential for companies spearheading the industry into this new age.

Robin Chhabra, Founder and CEO of Dextrus said, "The 2024 budget presents an opportunity to unleash the full potential of India's real estate sector, aligning its growth trajectory with broader economic goals while meeting the evolving needs of society and business in a post-pandemic world. The commercial real estate sector in India stands at a crucial juncture as it navigates through transformative changes brought about by evolving market dynamics and shifting societal needs. The demand for coworking spaces has amplified with the industry offering more and more affordable and flexible solutions and hence the expectations from the 2024 budget are set high."

"Shared workplaces cater not only to freelancers and startups but also to established companies seeking flexibility and collaboration. Hence, stakeholders are looking forward to both financial and non-financial incentives to stimulate growth not only in the co-working space industry but for the overall business sector. Recognition of real estate as an industry is inevitable, and a prime ask from the budget. This would pave the way for targeted policy interventions and incentives that cater specifically to this sector's own unique challenges and opportunities," Robin Chhabra added.

"Significant support can be provided to the real estate sector especially in taxation. Input or investment tax credits tailored for start-ups and angel investors will foster innovation and entrepreneurship. These incentives would encourage greater participation of early-stage ventures in the development of the industry and thereby enrich the sector's overall ecosystem. To ease financial burdens, there is a strong expectation for lowering Tax Deducted at Source (TDS) rates. It would enhance liquidity and improve working capital cycles, thereby enabling seamless and timely project completion. Also, enhancing the benefits under Section 80JJAA of the Income Tax Act will help incentivize job creation especially within start-ups. By encouraging companies to expand their workforce, especially in skilled and semi-skilled roles, the budget could spur economic growth and social mobility. There is also a strong call for incentivizing green building initiatives in the budget. Measures such as tax breaks or subsidies for projects adhering to conscious construction practices and energy-efficient designs would not only help take strategic steps towards reducing environmental impact but also reduce operational costs for developers in the long term," Robin Chhabra commented.

"Government needs to invest in e-governance solutions and establish a unified single window system for obtaining clearances and permits that will result in streamlining of regulatory approvals and administrative processes. Such reforms would significantly enhance ease of doing business, reduce bureaucratic hurdles, and foster a more transparent and efficient regulatory environment. The government could also invest in creating avenues to promote co-working such as industry fairs and networking events to help enhance industry visibility. Government-sponsored events can serve as platforms for knowledge exchange, partnerships and showcasing innovations within the co-working ecosystem," Robin Chhabra stated.

Amit Jain, Chairman & Managing Director Arkade Developers said, "As the real estate sector evolves with innovative technologies and tailored infrastructure, it is crucial for the sector to have an 'Industry status' in the Modi 3.0 budget 2024. It is also critical to include the real estate industry in the GST under a one-nation, one-tax framework. The sector is crucial to the economy, accounting for around 8% of total GDP. It is also the second largest employer after agriculture, and over 200 auxiliary industries rely on it. As a result, the government should take proactive measures to increase demand, rationalize costs, and minimize regulatory bottlenecks. While residential real estate is experiencing a significant surge with historic high numbers, additional tax relief for individuals is essential to combat rising inflationary pressures. This can potentially be accomplished by increasing the deduction for interest on home loans from INR 2 lakhs to INR 5 Lakhs. The current surge in interest rates has resulted in higher Equated Monthly Installments (EMIs) for homebuyers, limiting fund utilization, thereby limiting the potential of the sector at large."

Mohit Malhotra, Founder & CEO, NeoLiv said, "As a developer in India's burgeoning real estate sector, our expectations for the upcoming fiscal year 2024-25 budget are shaped by our understanding of the expanding middle-income group and its housing needs. One of its critical aspects is the proposal concerning input tax credit under GST, crucial for companies leading the sector into this new era. Providing developers access to input tax credit is not just a financial incentive but a strategic measure that can boost sectoral growth for homebuyers and drive economic recovery."

"In our focus on the mid-housing segment, pivotal for us, we anticipate the creation of new development opportunities with increased budgetary allocations for infrastructure. This will facilitate easier access to city centers, essential for mid-range housing projects that cater to the needs of the middle-income demographic. We look forward to the budget recognizing the future potential of this segment. As we await the budget announcement, we are hopeful that it will include provisions to empower new age developers with robust financial support and transparent policies, thereby fostering the growth of the housing sector in the country," Mohit Malhotra further added.

Anil Gupta, President of CREDAI NCR Bhiwadi Neemrana said, "The RBI's decision to maintain the repo rate at 6.5% in the second meeting of FY25 is a positive development for the real estate sector. This stability in interest rates will make homes more affordable for potential buyers, potentially elevating the existing upward trajectory of the housing market. Additionally, lower borrowing costs could encourage industrial investment. A reduction in unsold inventories, coupled with stable interest rates, could help sustain buyer demand. We welcome this move and believe it can contribute to a flourishing real estate sector and a stronger Indian economy."

The Real Estate sector in India is hopeful for progressive policy measures in the 2024 budget that address immediate challenges and lay a robust foundation for sustainable growth and development. The government can thus catalyze a transformative change as well as position the sector as a key driver of economic recovery and development through strategic implementation of above-stated initiatives.