Budget 2023-24: Heads of leading real estate associations share their analysis and insights

Budget 2023-24: Heads of leading real estate associations share their analysis and insights

The Union Budget 2023-24, presented by Finance Minister Nirmala Sitharaman last week has been discussed at length in various forums

Sheetal Shelar PatilUpdated: Thursday, February 09, 2023, 08:34 PM IST
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The Union Budget 2023-24, presented by Finance Minister Nirmala Sitharaman last week has been discussed at length in various forums. The obvious question, uppermost on your minds, would be how it can impact your property purchase decisions going forward. The answers to this and other relevant questions is being provided by the heads of leading real estate associations, who have shared their analysis and insights. Presenting key excerpts.

Rajan Bandelkar, President, NAREDCO

This is yet another growth-oriented budget with major focus on relief to middle class and infrastructure development. Infrastructure is the pivot of India’s economic growth and real estate is among the most important constituents of this infrastructure basket. Government’s decision to increase the allocation to the flagship Pradhan Mantri Awas Yojana (PMAY) by 66% to a record level of Rs 79,000 crore will give a much-needed boost to demand in the affordable housing segment. The relaxation on the taxation front for the middle class and the tax exemption up to the annual income of Rs 7 lakh and other incentives would put in more money in the hands of the common man, thereby allowing them more scope to realize their dreams of having their own homes. The sector, however would require relief in taxation in terms of housing and boost is required for boosting purchase of more of one property, which would go a long way in achieving the goal of “Housing For All". It is expected that the government will take up further demand boosting measures going ahead in line with its focus on growth.

Jitendra Mehta, President, CREDAI-MCHI Thane

We are happy and congratulate the Hon’ble Finance Minister for giving what I feel has been the best budget of the decade, one which will definitely prove to be a booster for the housing industry. The budget focuses on infra development and job creation, which will ensure economic growth – which is ideal for real estate development. Extension of minimum threshold of income tax exemption to Rs 7 lakh and reduction of maximum tax slab for individuals to 25 per cent will result in a lot of disposable money in the hands of individuals. This will have a positive impact on home buying. The outlay for PMAY being enhanced by 66 per cent to over Rs. 79,000 crore should provide the much needed ‘positive push’ for housing.

Dr. Niranjan Hiranandani, Vice Chairperson, NAREDCO

A fiscally ‘balanced’ budget, I rate it at 8/ 10. It has aptly addressed the economic growth of India by augmenting the capital expenditure outlays in infrastructure up to Rs 10 lakh crore accounting to nearly 3.3% of GDP. This will have a multiplier effect on real estate asset classes like the residential, commercial, industrial and logistics sector. Infrastructure development is pivotal for employment generation and opens up hinterlands across geographies for all sorts of real estate developments. Incremental PMAY allocation up to Rs 79,000 crore will give impetus to affordable housing and benefit a wide segment of homebuyers. Rebates in personal tax will permit additional disposable income in the hands of the discerning homebuyers to be invested back in a safe asset ‘home’. The capital gain tax benefit on the sale of property above the value of Rs 10 crore is sought to be withdrawn. Families are liable to pay capital gain tax which will disincentivize families to buy multiple properties as a security provision for their children.

Dinesh Doshi, President, NAREDCO Progressive Neral Karjat

A positive Budget Speech by the Finance Minister, best described as ‘balanced and pro-growth’ has a major positive for real estate comes in form of enhanced outlay for PM Awas Yojana by 66 percent to over Rs. 79,000 crore. From the perspective of Neral Karjat as also ‘Mumbai 3.0’, the Green credits scheme will support sustainable homes and carbon neutral development. Disposable income is expected to go up, as a result of positive steps in terms of income tax including exemption for income up to INR 7 lakh and the new tax slabs. The Budget has a clear goal - capital expenditure loans to be spent on developing urban planning and infrastructure will boost development of affordable, carbon neutral cities in locations like Neral Karjat and Mumbai 3.0 would benefit.

Boman Irani, President, CREDAI-MCHI

Budget 2023-24 is well balanced, Rs. 10 lakh crore capital investment, a steep increase of 33%, will enhance growth potential and job creation, crowd-in private investments, and provide a cushion against global headwinds, which will help the real estate sector to maintain stability. The increase in outlay towards PMAY resonates with the Government’s committed mission of meeting the housing shortage. This will result in increased investment and activity in the construction sector. In addition, increasing the tax rebate cap to Rs 7 lakh under the new tax may give taxpayers more purchasing power. However, the new tax regime offers no incentives, especially tax exemption on housing loans, which may have a slight negative impact on the real estate sector in the short term, especially considering the fact that the sector is yet to recover fully. Under Section 80C of the old tax regime, there was a tax relaxation on housing loans (principal plus interest). This incentive is no longer available with the transition to the new tax regime. Moreover, as loan interest rates have almost touched the double-digit zone, it is also uncertain whether homebuyers can save enough money under the new tax regime. Even though there was little for the real estate sector, especially our demand to increase the tax incentives on principal and interest rate amounts on home loans. However, the Government’s aim to boost and accelerate infrastructure development will eventually reflect in the growth and stability of the real estate sector.

Gautam Thacker, Chairman, NAREDCO Progressive Neral Karjat

This Budget will ensure the push to develop Affordable Housing. In sync with this, real estate industry will look forward to CLSS scheme also being reintroduced, which will ensure a larger impact. We are glad that the Indian Government is taking steps towards creating Carbon Neutral Development, which dove-tails into growth prospects for Mumbai 3.0. It is a welcome first step, and we have a long way to go. The tax exemption will doubtlessly benefit the middle class. Housing, as a result, should get a collateral boost. The budget focuses on Infrastructure development and job creation, which will ensure economic growth and real estate development.

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