Budget 2024 Expectations: Real Estate Industry Seeks Tax Breaks and Industry Status

With the Union Budget 2024 approaching, the real estate developer community has outlined its wishlist for the government, seeking measures to boost industry growth and incentivize homebuyers.

Industry status tops the agenda

"Elevating the real estate sector to industry status is key," said Ramesh Ranganathan, CEO of K Raheja Corp Homes. "We anticipate impactful policies fostering industry growth, with tax incentives making it more lucrative for homebuyers. "Developers also called for shortening the holding period for residential properties as long-term capital assets to 12 months, "aligning with market dynamics," Ranganathan added.

Affordable housing concerns

While demand is strong in the luxury segment, affordable housing faces a downturn in loan applications. Developers attribute this to factors like land and construction cost increases, making project feasibility challenging.

Easing capital gains tax burden

Under Section 54 of the Income Tax Act, long-term capital gains from existing homes can be used to buy or build new ones. But utilizing this exemption with under-construction properties requires completion within three years, a challenge developers say is exacerbated by RERA regulations and project delays."We recommend extending the completion timeline for under-construction properties to five years," said Shishir Baijal, CEO of Knight Frank India.

Industry status seen as a growth catalyst

"RERA implementation has improved transparency, but industry status would unlock better financing access," said Mohit Goel, MD of Omaxe Group. "This aligns with the vision of 'Housing for All' and job creation."

Stamp duty relief sought

Concessions in stamp duty rates or allowing twice the duty paid as an income tax deduction could incentivize more property registrations, said Saurabh Garg, co-founder of NoBroker.com. He cited the success of Maharashtra's pandemic-era stamp duty reduction in driving sales.

Expectations remain high

The developer community awaits the budget with high hopes, seeking measures to address industry concerns and stimulate growth across all segments.