Budget 2022: Sops to boost investment in real estate sector, say brokerages

There are multiple expectations from firms in the real estate sector, the second largest employer after agriculture. Key among them are raising the exemption limit under Section 24 (b) of the Income Tax Act for interest on housing loans taken for self-occupied property from the current Rs 2 lakh to Rs 5 lakh to improve liquidity.

Brokerages also expect an increase in the safe harbour limit under section 50C of the I-T Act for home buyers purchasing a property below the circle rate by up to 20 per cent beyond June 30 for primary sale of residential units of value up to Rs 2 crore. This will help builders reduce their unsold ready-to-move inventory, especially Lodha (Macrotech Developers) and Oberoi Realty, as they are sitting on the most such units, they add.

Additionally, analysts at Morgan Stanley expect liberalisation of foreign direct investment (FDI) norms in real estate, which will allow increased investment in residential and rental housing, and improve the demand-supply gap.

The sector has also sought reduction in the holding period for real estate investment trusts to 12 months from 36 months, to spur investments from domestic and foreign institutional investors into the sector.