Real Estate Sector Expects Incentives To Boost Affordable Housing

Real Estate Sector Expects Incentives To Boost Affordable Housing

The government's ongoing push for "Housing for All" by 2022 has seen considerable progress, yet there remains a significant gap that needs to be bridged.

Bhalchandra ChorghadeUpdated: Tuesday, July 02, 2024, 09:29 PM IST
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Real Estate Sector Expects Incentives To Boost Affordable Housing | Wikipedia

As the Government of India gears up to unveil its annual budget later this month, the real estate sector, a cornerstone of the nation's economy, is keenly anticipating a series of measures that could significantly impact its trajectory. One of the primary expectations from the budget is the introduction of incentives to boost affordable housing. The government's ongoing push for "Housing for All" by 2022 has seen considerable progress, yet there remains a significant gap that needs to be bridged.

“Industry expects a comprehensive overhaul of tax policies to foster competitiveness and efficiency across corporate and individual tax frameworks. For the home buyer, increasing the limit of interest deduction paid on home loans from Rs 2 lakh to Rs 5 lakh, bringing long-term capital gains at 10 per cent on par with equity shares; and reducing the period of holding house property to 12 months from the existing 24/36 months to qualify as a long-term capital asset would be a welcome move,” Chairman of NAREDCO, Dr Niranjan Hiranandani said.

The stakeholders are also hopeful for enhanced tax benefits for both homebuyers and developers, which could stimulate demand and make housing more accessible to the lower and middle-income segments. Moreover, there is a strong call for the rationalization of the Goods and Services Tax (GST) on under-construction properties. A single-window clearance system for real estate projects is another long-standing demand.

The Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO- Maharashtra, Manju Yagnik says that the sector expects increased allocations and incentives under the Pradhan Mantri Awas Yojana (PMAY) to boost affordable housing for economically weaker sections and low-income groups. “Simplifying GST rates for under-construction properties and reducing stamp duty rates are expected to stimulate housing demand,” she said.

Stating that the government’s initiatives in boosting infrastructure projects have helped the sector, Director, Group Promoter’s Office, MD & CEO - Shapoorji Pallonji Real Estate (SPRE), Venkatesh Gopalakrishnan says, “As the future of our industry depends on the continued flow of such projects to enhance urban living standards and develop new areas, we hope the government will announce further measures in this direction. Additionally, we hope for announcements that will attract capital investments and boost FDI inflows into India.”

“The real estate sector seeks measures to enhance housing accessibility and affordability,” VP Finance at Ashar Group, Dharmendra Raichura said, adding, “With the Real Estate (Regulation and Development) Act now implemented across most states, granting ‘Industry’ status to the real estate sector could facilitate easier and more cost-effective financing for developers. To address the land shortage in metropolitan and semi-metropolitan areas and to make housing more affordable, the government should consider releasing government-owned lands at reduced costs since it will significantly contribute to lowering overall real estate prices.”

President of CREDAI-MCHI, Domnic Romell said, “Given that over 50% of real estate projects in Mumbai are redevelopment projects, the government should consider levying no GST on redevelopment projects. This step would ensure safer, better, and more affordable housing for the citizens of Mumbai. To address the validated demand for 11.2 million houses, redefining affordable housing for metro cities like Mumbai is critical. A uniform affordable housing criterion for both metro and non-metro cities, without a price cap, should be established, with all houses of 60 sq m declared as affordable housing.”

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