Union Budget 2024-25 brings high expectations for real estate sector

Expectations are high as the Modi 3.0 government prepares to unveil reforms aimed at boosting housing, office spaces, and commercial areas amid rising demand

Budget 2024: India’s real estate sector, a pivotal player in urban development, anticipates significant shifts ahead of the Union Budget 2024-25. With increasing demands for housing, office spaces, and commercial zones, industry leaders are closely watching for crucial policy changes under the Modi 3.0 administration.

Anticipated Budget reforms
 

Emphasising the sector’s expectations, Chairman of Anarock Group, Anuj Puri, underscored the call for tax incentives and infrastructure upgrades to elevate urban living standards and facilitate growth in emerging regions, as reported by News18.

Push for ‘industry status’
 

Puri reiterated the longstanding demand for granting ‘industry status’ to the housing sector, a move that could catalyse growth and investment.

Focus on affordable housing

In 2024, housing sales and new launches surged, especially in major cities, with a focus on mid-range and premium segments. However, the affordable housing sector, vital for lower-income groups, faced challenges with sales declining after the Covid-19 pandemic. Addressing this issue requires targeted interventions like tax incentives for both developers and buyers.

Reviving affordable housing
 

Anarock Research further highlights the decline in affordable housing’s market share, urging the reinstatement of incentives like the Credit-linked Subsidy Scheme (CLSS) under PMAY and 100 per cent Tax Holiday benefits for developers. These measures aim to reignite demand and supply in the affordable housing segment, crucial for inclusive urban growth.

Adapting to market realities
 

Puri advocated for revising the definition of affordable housing criteria to better reflect city-specific dynamics. In cities like Mumbai, where current affordability thresholds fall short, adjustments in pricing benchmarks are essential to ensure broader access to benefits like lower GST rates and government subsidies.

Proposal to bring real estate under GST

In a recent interview with Business Standard, Sanjiv Puri, president of the Confederation of Indian Industry (CII), emphasised that the Modi 3.0 administration should implement a three-rate structure for GST and proposed bringing real estate under its ambit.