The Union Budget 2024 brought a big relief for homebuyers and developers.
It has been a day since the Union Budget 2024 presentation by the Finance Minister Nirmala Sitharaman. The time is now to focus on evaluating how get the maximum out of it based on individual financial status. In this article, we delve into one of the most growing sectors in India, real estate and housing rental sector and its emerging potential for middle income group people.
With an ambitious goal of “Housing for All”, increasing the affordable housing rate via Pradhan Mantri Awas Yojana (PMAY) was the major focus in the last Union Budget. Moreover, house developers received lucrative incentives like holidays under Section 80IBA as well as enhanced allocation rate through the SWAMIH, which helped liquidity for stressed and long-pending projects.
The finance minister has introduced a number of evolving measures that can impact the real estate sector significantly. From urban planning to affordable housing projects, infrastructure development to rural connectivity, this union budget has served to those enthusiastic about buying or renting properties.
The budget can proved to be a game changer for Rental housing sector. The FM Nirmala Sitharaman announced government’s planning for “interest subsidy” to provide housing loans at an affordable rate. This may help booming dormitory-type accommodation in urban or industrial areas.
Real estate consultancy company Knight Frank India director for Kolkata region, Abhijit Das talked about opportunities in dormitory-type accommodation: “This is a very interesting concept and should have a good demand in the healthcare, IT and education sectors.”
“The budget has allocated Rs 2.2 lakh crore for urban housing over the next five years. This increased funding should accelerate urban housing projects, improve urban infrastructure and enhance living conditions in cities, attracting more investments into the urban real estate market,” said Sanjay Jain, managing director of Siddha group.
Pradeep Aggarwal, founder & chairman, Signature Global (India) Ltd, praised the budget “The government's decision to allocate ₹10 lakh crore under the PMAY urban scheme, targeting 3 crore houses, and the key focus on rationalizing stamp duty for homebuyers, especially for women, underscores a robust vision for urban development.”
Do you have any ancestral home? Are you planning to sell it now? Wait, this might not be the right time for you. There will be a restructuring of the “long-term capital gains tax on property sale,” as mentioned in the budget. This will lead to a higher tax outgo for the owner. “This proposal is a silent killer for those who have owned property for a while and want to sell now,” said Merlin group chairman Sushil Mohta.
“Older properties had the benefit of indexation, after removal of the same the tax liability will increase on the seller. This could have a negative impact on sales. Over time, this could rationalize as newer apartments/projects will have a lower tax incidence,” said Belani group director Nandu Belani.
The finance minister shared a provision of a “unique identification number’ for land or “Bhu-Aadhaar” in rural areas while digitisation total urban land records.
“Land records in urban areas will be digitized with GIS mapping. An IT based system for property record and tax administration will be established. It will improve the financial position of urban local bodies,” finance minister said.
According to some industry experts, this initiative will bring transparency in handling the land.
Real estate investors, developers as well as stakeholders will now expect increased opportunities along with supportive policy environment through this budget.
