Budget 2024: Budgetary Boost Awaited For India's Burgeoning Property Sector

As election season approaches in 2024, the budget opens a window for holistic measures that can harmonize economic essentials of infrastructure upgrades, housing growth and job creation across India’s extensive urbanizing clusters.
Budget 2024, 
Budget 2024, Property, Elections

As India sustains robust economic growth, the 2024-25 budget presents a timely opportunity to activate reforms and incentives for the country’s real estate sector. Core areas like affordable housing, rental housing and infrastructure upgrades warrant attention along with resolving procedural pain points around taxes and compliances.

Industry experts highlight the pressing need to expand affordable housing coverage for masses. As LC Mittal, Director at Motia Group explained, “Affordable housing remains grossly underserved by scale and incentives. Raising subvention and realigning GST with intrinsic demand can expand this critical segment.” He suggested funding peripheral infrastructure to unlock mid-market potential across India's expanding urban regions.

The budget also offers scope to spur rental housing and appeal to mobile millennials through job-centric development. Gurmit Singh Arora, National President at Indian Plumbing Association said, "The budget must promote rental housing at scale to complement ownership targets, especially for mobile millennial workforces." Proposals around lowering GST, investment allowances and easier bank financing can make this high-potential asset class more viable.

Additionally, experts advocate incentives to grow REITs as instruments for global capital, as Suren Goyal, Partner at RPS Group explained: “REITs offer major growth headroom to attract global capital if policy inhibitors like dividend tax get resolved." Broader last-mile funding allowances in areas like mortgage rebates and low-cost project finance would further kindle housing momentum.

The budget can also play a major role in ironing out procedural uncertainties that hinder transparent transactions. Gunjan Goel, Director at Goel Ganga Developments suggested, “Confusion continues around ambiguous legacy taxes, complicated compliances and property valuations. Streamlining and reducing stamp duties while increasing tax clarity will stimulate more transparent transacting.”

Mohit Jain, Managing Director of Krisumi Corporation said, "Single Window Clearance, Industry Status and Increase in tax exemption for housing loans are some of the steps, we expect in the upcoming budget. The exemption limit on housing loans should be enhanced to Rs 5 lakhs. Besides, the Government should continue its thrust on the infrastructure as it has multiplier effect on the economy as a whole and real estate too stands to benefit from it, the upsurge in Gurugram real estate market is a case in point."

"We strongly appeal to the Finance Minister to thoroughly consider increasing the income tax deduction applicable to home loan repayments. The current deduction of Rs 2 lakh against home loan interest has remained unchanged for the past decade, with the last adjustment being an increase of Rs 50,000 in 2014," Prashant Rao, Managing Director, Poulomi Estates, a Hyderabad based real estate developer said.

"Considering the rise property prices, the borrowing amounts have escalated substantially, besides that interest rates has gone up as well, resulting in higher EMIs for homebuyers. It is imperative for the government to consider doubling the home loan interest deduction limit to Rs 4 lakh. This measure would provide substantial relief to potential homebuyers and contribute to an economic boost," Prashant Rao added.

In summation, the 2024-25 budget offers a vital launching pad for reforms to unlock the next evolution of sustainable economic growth powered by an empowered real estate sector serving aspirations across segments and geographies.

Much depends on budget priorities balancing home ownership proliferation with rental housing for mobile millennials and industry-friendly measures enabling global risk capital infusion through instruments like REITs. Equally, fixing pain points around taxes and compliances builds efficiency in legal and financial pathways.

As election season approaches in 2024, the current budget likely constitutes the last open policy window for holistic measures that can harmonize economic essentials of infrastructure upgrades, housing growth and job creation across India’s extensive urbanizing clusters. These tailwinds for real estate also assure balanced regional development.

By favoring such practical solutions over radical discontinuities, the budget can nurture inclusive expansion anchored in housing security and livelihood access.

Indeed, the local living ecosystem lies at the heart of our economic and social progress. Its sustainable multiplication through budgetary provisions af-firms India’s tryst with a developed future that leaves no citizen behind.

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