Last year, the real estate industry witnessed robust expansion, with the residential property market marking 48% year-on-year growth.
Housing sales and new launches surged, with a notable focus on mid and premium segments.
The transactions in the commercial segment also doubled during the year.
It continues to be a driving force behind India’s economic growth, actively building the nation’s path to prosperity
Persistent challenges
Issues such as liquidity constraints, complex regulatory frameworks, and the need for infrastructural upgrades remain at the forefront of industry concerns.
The affordable housing segment has seen a slowdown, highlighting the need for targeted policy interventions.
Even though the government has increased budget allocations for infrastructure upgrades, sustaining this growth requires a few critical steps.
Expectations
From potential tax reforms and infrastructure investments to measures addressing ease of doing business and sustainability, the real estate’s wish list is comprehensive
Tax relief: Industry experts are advocating for an increase in the deduction limit for home loan interest under Section 24 of the Income Tax Act, now capped at ₹2 lakh per annum
Limiting taxes: From land acquisition and joint development agreements to construction, completion and final sale, the cumulative tax exposure from both Central and State governments can be overwhelming.
A key proposal is to implement a defined cap on the total tax burden, ensuring it doesn’t exceed 45% to 50%.
Industry status: This could unlock easier access to financing for developers, cut borrowing costs, and attract significant investments in the sector.
Green buildings: With increasing focus on sustainability, the sector is anticipating incentives for green-building practices.
This could include tax benefits for developers implementing eco-friendly technologies, subsidies for green-building materials, and incentives for homebuyers opting for certified green homes.
Ease of business: This includes streamlining approval processes, reducing the number of permits required, and potentially introducing a faceless single-window clearance system for real estate projects across the country
Project support: This could include the expansion of the government’s SWAMIH (Special Window for Affordable and Mid-Income Housing) investment fund or the introduction of new mechanisms to complete stuck projects, benefiting all stakeholders.
GST rationalisation: The Goods and Services Tax (GST) regime continues to be a point of discussion in the real estate sector.
There are hopes for further rationalisation of GST rates, particularly for under-construction properties.
Affordable housing: The Budget should consider reinstating incentives such as the Credit Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY).
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