Real Estate expects tax reliefs, increased funding and long awaited Industry status in Budget 2025

ANI January 13, 2025 277 views

The real estate sector is eagerly anticipating Budget 2025, with industry leaders pushing for significant reforms and support. Key expectations include tax reliefs, expansion of affordable housing initiatives, and granting industry status to real estate. Prominent executives like Niranjan Hiranandani and Anuj Puri are advocating for measures that could reduce borrowing costs and stimulate market demand. These proposed changes could potentially contribute to India's economic growth by making homeownership more accessible and supporting the sector's recovery.

"Recognizing real estate as an industry can significantly enhance the sector's performance" - Ritesh Mehta, JLL India
Real Estate expects tax reliefs, increased funding and long awaited Industry status in Budget 2025
New Delhi, January 13: As the Union Budget approaches, leaders from the real estate industry have voiced their expectations, focusing on measures to revive affordable housing, streamline regulations, and enhance market demand.

Key Points

1

Tax deduction increase for home loans to boost affordability

2

Expanding rental housing initiatives beyond industrial workers

3

Seeking infrastructure status to reduce borrowing costs

4

Reviving Credit-Linked Subsidy Scheme for homebuyers

The key demands include tax reliefs, increased funding, and granting the long-awaited industry status to real estate.

Niranjan Hiranandani, Chairman of NAREDCO, highlighted the need to make homeownership more affordable by increasing the tax deduction limit on home loan interest payments from Rs 2 lakh to Rs 5 lakh. He also called for infrastructure status for the housing sector, which would reduce borrowing costs and provide easier access to financing.

Expanding rental housing initiatives and rationalizing individual tax rates from 37 per cent to 25 per cent are other measures he suggested to boost market participation and disposable income. Affordable housing remains a top priority for industry leaders.

He said "To improve rental affordability, it is imperative to expand rental housing beyond industrial workers. We recommend deleting notional income from house property held as stock-in-trade to facilitate the creation of a sufficient rental housing stock, in alignment with the 'Housing for All' objective".

Anuj Puri, Chairman of ANAROCK Group, advocated for reviving the Credit-Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY) to encourage first-time homebuyers.

He also urged the government to release centrally controlled land for affordable housing projects and revise upwards the Rs 45 lakh price cap for affordable homes in high-cost cities like Mumbai.

He stated "For the real estate sector, key expectations include industry status recognition and a revival of the affordable housing segment. Once a promising sector, affordable housing--homes priced under INR 40 lakh--has struggled post-pandemic, with demand and supply shrinking significantly".

Anshuman Magazine, Chairman & CEO of CBRE India, emphasized the need to tackle rising construction and borrowing costs. He suggested revising the affordable housing price cap, introducing tax incentives for REIT investments, and increasing tax deductions for home loan interest. These measures, he noted, could attract new investors and provide much-needed relief to homebuyers.

He added "Additionally, rationalizing GST rates and incentivizing green building adoption will help build a sustainable, technology-led growth trajectory. With these transformative measures, Budget 2025-26 can lay the foundation for a resilient real estate sector, driving economic development".

Ritesh Mehta, Senior Director at JLL India, stressed the importance of granting industry status to real estate. This move would enable developers to access cheaper loans and lower construction costs, ultimately benefiting homebuyers

He said "Recognizing real estate as an industry in the budget can significantly enhance the sector's performance. With this status, developers can access cheaper loans and reduced borrowing rates, ultimately lowering construction costs. These savings can be passed on to homebuyers, making housing more affordable".

With real estate contributing nearly 7 per cent to India's GDP, industry leaders believe that these measures would not only strengthen the sector but also support overall economic growth.

The focus on affordable housing and infrastructure development, they say, could help the residential segment regain its momentum in 2025.

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