23 Jul Real Estate Budget 2024: Key Expectations for Industry Status, GST Reforms, and Affordable Housing
Real estate developers in Noida and Greater Noida are looking to the upcoming Budget, presented by Finance Minister Nirmala Sitharaman on July 23, as an opportunity to address longstanding sector concerns. They are advocating for the sector to be granted ‘industry status’ to facilitate easier access to funding and seek relief from current GST challenges, including the 28% tax on cement.
Key expectations from the Budget include:
- Industry Status: Developers are calling for the real estate sector to be recognized as an industry, which would provide access to lower-cost financing and other benefits. They believe this status will help spur investment and economic growth.
- GST Reforms: There is significant concern over the high GST rate on cement, which is currently set at 28%. Developers argue that reducing this rate would lower building costs and improve affordability for homebuyers. Additionally, they seek GST input credits for residential real estate to stabilize costs and enable developers to pass savings onto buyers.
- Tax Incentives: The industry body CREDAI suggests that tax reforms, including lower income taxes for both corporations and individuals, along with targeted incentives, could boost investment. They also advocate for an expansion of the SWAMIH stress fund to support the sector.
- Affordable Housing Support: Experts propose increasing the home loan interest exemption to Rs 8 lakhs annually and adjusting Section 80C to cover housing loan principal deductions or raising its limit to Rs 5 lakhs. They also recommend raising the affordability cap for housing in metro areas from Rs 45 lakh to Rs 75 lakh.
- Regulatory Improvements: Developers emphasize the need for a streamlined approvals process and enhanced transparency through a robust regulatory framework. They suggest innovative financing mechanisms, such as green bonds for sustainable development, to align economic growth with environmental goals.
- Foreign Investment: To stimulate growth and innovation in the luxury market, easing FDI regulations and simplifying GST are seen as crucial steps. Simplifying GST procedures and reducing input costs for materials like steel, cement, and fuel are also high on the agenda.
The real estate sector is hopeful that these budgetary measures will address its critical issues and boost the industry’s contribution to economic growth.
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