Budget 2023: As the Indian real estate market emerges from the shadow of a global epidemic, it has high expectations for Budget 2023. Despite the fact that demand for real estate in India has increased in recent months, the real estate and construction industries are hoping for some specific relief. Even though the Coronavirus pandemic reduced site visits and home demand across the country, the months that followed inspired confidence with a resurgence in housing demand. The demand for residential housing in India's top eight cities increased by more than 15% year on year.
Similarly, a significant rebound is expected in 2023. The real estate industry expects the government to take specific steps to smooth the road to recovery at a time when it is dealing with post-Corona issues such as rising input costs and razor-thin margins.
Here is what industry professionals have to say about the industry expectations from the budget.
Speaking of the same, Gurmit Singh Arora, National President, Indian Plumbing Association said, "Stamp duty needs to be reduced. Following the implementation of GST, the industry was burdened, and it is extremely difficult for builders to pass it on to consumers. This can be accomplished by granting waivers rather than incentivizing it. In order to reduce the nation's carbon footprint, the government should incentivize green building. The government should also encourage and recruit more entrepreneurs."
There is an express need for more tax sops for home buyers as well as investors. In the opinion of Nakul Mathur, MD, Avanta India, "Indian real estate stands on a strong footing with a hike of 50% in sales transactions in 2022, compared to the previous calendar year. The positive sentiments will continue in 2023 backed by a healthy economic outlook, expansion in the job market, and a rise in per capita income. Meanwhile, it is also imperative for the governing agencies to take proactive steps to further build consumer demands alongside streamlining the supply cycle. Steps such as reducing GST rates on raw materials such as cement & steel, offering better credit for developers, and single window clearance can immensely help the overall sector."
Hari Kishan Movva, Senior Vice President, SILA (Real Estate) comments, “Commercial real estate had a mixed year in 2022 with flexible office providers performing well. The 2023 budget the industry hopes will offer some positives to help strengthen the real estate market. Given that the inflationary environment is the key risk for real estate, we are also expecting a leeway in terms of reduction in GST rates for key raw materials and re-introduction of input tax credit which would help developers tide over inflationary pressures.”
As per Ankit Goel, Director, Goel Ganga Developments, “In this budget, the government should mull impetus such as an increase in home loan interest deduction. Under section 24 of the Income Tax, one can avail of a deduction of up to Rs 2 lakh of home loan interest on the income tax. If the government can increase the limit to Rs 5 lakh, it can be a great help for both buyers as well as developers, as due to other succeeding/ successful factors, the prices and EMIs of homes have gone up, so it is a must to increase the deduction for the same”.
Adding to the same, Mr. Suren Goyal, Partner, RPS Group states, " Indian real estate constitutes close to 8% of the Indian economy. It is also the second-largest job creator after the agriculture sector and close to 250 ancillary industries are dependent on it. This further reflects the importance of the sector and it is essential that GOI take concentrated efforts to help the industry. Overall the industry looks upbeat but the rise in interest rates can decelerate the growth juggernaut. Hence the government should step up and take proactive steps to reduce lending rates. If directly reducing the rates is not feasible then it should at least try other means such as offering incentives to first-time home buyers and rendering more lucrative deductions in income tax returns."
Looking back at the year 2022 as the most eventful years for Indian real estate with sales recovery observed in many of the major markets in the country, Mrinaal Mittal, Director, Blackteak Realty said, “Real Estate Industry is very sanguine about the 2023 budget and hopes to continue the strong momentum of the previous year. The primary emphasis and ask is higher tax exemption on home loans to generate a healthy demand. As for the LTCG, the tax rate should be decreased with relaxation on the time limit on construction of the new property. The extended timelines for buildings that are under construction to balance capital gain would be a very welcome step for boosting this industry. Such endeavors will not only encourage more consumers to buy homes but also create higher accessibility. The new budget can bring about many desired and vital changes to the real estate industry, benefiting consumers and developers alike so that they can keep contributing to India’s growth story."