Pre-Budget expectations for the Real estate sector by Mr. Kuldeep Jain, Founder & CEO, Build Capital

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New Delhi, January 31, 2025: As the Union Budget 2025-26 approaches, the real estate and infrastructure sectors are hopeful for a budget that drives growth and addresses long-standing industry concerns. Here are critical expectations:

Tax Reforms: Increasing the tax deduction limit under Section 24(b) for home loan interest, currently capped at ₹2 lakh, would provide much-needed relief to homebuyers, especially in metro cities where property prices are high.

Affordable Housing Project: Extending the benefits of Section 80-IBA for affordable housing projects upto March 2029 would encourage more developers to venture into affordable real estate projects development and government mantra of Housing for all gets fulfilled.

GST Tax Rate reduction and Streamlining: The current GST regime remains ambiguous and poses a significant challenge for developers. Simplifying, streamlining and reducing GST Tax rates is imperative to reduce complexities and alleviate the financial burden on developers.

Demand for Industrial Status: The long-standing demand for granting industrial status to the real estate sector must be addressed. This will enable easier access to financing, reduce borrowing costs, and boost investor confidence.

Rationalization of Stamp Duty: Stamp duty rates in certain states, currently as high as 8-9%, are a major financial burden for homebuyers. Rationalizing these rates across states for homes upto Rs 1.50 crores is crucial to make property ownership more affordable and drive housing demand.

Single-Window Clearance: A streamlined project approval system particularly High rise and Environment clearance etc will reduce delays and enhance ease of doing business.

Sustainable Development Incentives: The government must prioritize green building initiatives and sustainable construction practices by offering tax benefits or subsidies to developers adopting eco-friendly technologies. This aligns with India’s commitment to its net-zero goals. 

Global Investment Boost: Policies that attract Foreign Direct Investment (FDI) into real estate, especially in commercial and tech-driven investment segments, can further strengthen the sector. Simplifying regulatory frameworks and providing tax incentives for global investors will help position India as an attractive destination for international capital. 

Real Estate Tech Adoption Fund: Offering incentives / allocating Funds for PropTech adoption and innovation will enable the sector to become more efficient and transparent. 

Increased Allocation of funds for Infra Development: Increased budgetary allocation to infrastructure development, including metro networks and multimodal corridors, will catalyze the growth of commercial real estate in urban and peripheral areas.

Support for REITs, InvITs and Fractional Ownership platform: Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) have been instrumental in bringing transparency and liquidity into the sector. Reducing the dividend distribution tax and offering further incentives for retail investors can enhance their adoption.Moreover, fractional ownership platforms are democratizing access to high-value real estate assets, and the government should encourage their growth through comprehensive and supportive policies.

The Union Budget 2025-26 presents an opportunity to address these areas and propel the sector toward sustainable growth, benefiting developers, investors, and end-users alike.

Corporate Comm India (CCI Newswire)