Vihang Sarnaik Director Vihang Group
As the nation is eagerly waiting for Budget 2024, it is crucial to underscore the pivotal role played by the real estate sector, contributing approximately 7% to the national GDP and standing as the largest employer with over five crore individuals engaged in this dynamic industry. As a home grown real estate brand, we hold optimistic expectations for the upcoming budget, advocating for comprehensive measures that can invigorate the sector and foster inclusive growth.
Granting Industry Status
Foremost among our wishlist is the long-anticipated grant of industry status to the real estate sector. This designation would not only extend access to funding options for developers, particularly those involved in larger projects but also signify a pivotal step in acknowledging the sector’s strategic importance to the country’s economic landscape.
Single-Window Clearance
To streamline processes and attract investments, the implementation of a single-window clearance system for real estate is crucial. Such a mechanism would not only expedite business operations but also enhance the overall appeal of the sector for potential investors.
Tax Relief on Second Home
In our pursuit of a more equitable real estate landscape, we wish to see a few revisions in specific tax brackets. Immediate attention is warranted for income tax relief on second home purchases, as well as a reconsideration of tax slabs on long-term capital gains from real estate. These adjustments stand to significantly benefit homebuyers while providing a much-needed boost to the real estate industry.
Redefining Affordable Housing
A critical facet of my expectation is the re-evaluating and redefining affordable housing criteria. I expect the honourable finance minister will find some merit in establishing a separate affordable housing index for each Tier-1 and Tier-2 cities with the impetus to the current revealing property prices in the metros.
The index should take into account the various influencing factors such as inflation, land cost, construction cost, approval cost, and labour cost in these cities. For instance, in the case of Mumbai, where housing costs are notably high, we suggest increasing the price ceiling of affordable housing from the current Rs 45 lakhs to Rs 90 Lakhs.
These few changes accompanied by an extension of subsidies like the Credit Linked Subsidy Scheme (CLSS) and Pradhan Mantri Awas Yojana (PMAY), would empower the unorganized sections and salaried professionals to realize homeownership.
Tax Benefits To Drive Women Ownership
Addressing gender disparities in property ownership is a key aspect of our wishlist in this budget. Recognising the alarmingly low 3% ownership rate among women compared to men, I hope the government will introduce some tax benefit schemes exclusively for working women.
A dedicated tax saving scheme for women by providing a tax benefit of up to INR 3 lakh on the principal amount for their first home purchase, would not only incentivize property ownership but also contribute to gender equality and larger financial independence amongst women.
Furthermore, I also suggest the removal of the Section 24(b) cap of Rs 2 lakh on interest paid by first-time female homebuyers, eliminating barriers and facilitating greater financial independence for women in real estate transactions.
In a nutshell, these strategic recommendations aim to infuse vitality into the real estate sector, fostering economic growth, social inclusivity, and gender equality. Implementing these measures in Budget 2024 will undoubtedly pave the way for a resilient and vibrant real estate landscape, positively impacting the nation’s economy at large.
