Budget 2025: As the Union Budget 2025 is all set to be presented on February 1, India’s real estate industry is looking forward to key announcements from Finance Minister Nirmala Sitharaman. With expectations focused on reforms in financing, taxation, and infrastructure development, industry experts believe that well-thought-out policy measures could bring major relief to middle-class homebuyers while boosting the sector’s growth.
The industry anticipates that the government could introduce initiatives to enhance affordability, streamline processes, and resolve funding issues, creating a win-win for both homebuyers and developers.
Here are 10 measures the government could consider to provide relief and drive momentum in the real estate sector.
- To ensure the success of initiatives like the Pradhan Mantri Awas Yojana (PMAY-U), the government must increase budgetary allocations for affordable housing and extend the loan-linked subsidy in the upcoming budget.
- Industry experts believe that the current GST framework is ambiguous and poses a significant challenge for developers. To reduce complexities and alleviate the financial burden on developers, it is essential to simplify and streamline GST rates.
- Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) have introduced transparency and liquidity into the sector. Reducing the Dividend Distribution Tax (DDT) and offering more incentives for retail investors can significantly boost their adoption.
- In some states, stamp duty rates are currently as high as 8-9%, placing a significant financial burden on homebuyers in India. Rationalizing these rates across all states, particularly for homes priced up to Rs 1.50 crore, is essential to make property ownership more affordable and boost housing demand.
- Rental housing can play a crucial role in addressing urban housing shortages and supporting workforce mobility. The government should introduce incentives and policy support to promote the development of affordable rental housing campuses.
- The industry demands that the real estate sector be granted industry status, enabling lower borrowing costs and improved access to institutional loans. This move would strengthen developers' ability to deliver quality projects on time and facilitate easier access to institutional funding at lower interest rates.
- Real estate stakeholders have urged the government to revisit the tax deduction limits under Sections 80C and 24(b) of the Income Tax Act. Increasing the deduction limits for home loan principal repayment and interest would enhance housing affordability and promote homeownership.
- The real estate sector has consistently played a crucial role in driving India's GDP growth and generating employment. In light of the growing interest of NRIs in Indian real estate, specific measures in the budget, such as reducing the tax burden on property transactions and enhancing ease of investment in residential and commercial properties, could prove highly beneficial.
- A streamlined and timely approval system will ease business operations, enabling developers to complete projects on time and reduce costs. It is expected that the focus will be on a single-window approval system, reducing compliance burdens, and attracting both domestic and foreign investments.
- Policies that attract Foreign Direct Investment (FDI) in real estate could further strengthen the sector. Simplifying the regulatory framework and providing tax incentives for global investors will help position India as an attractive destination for international capital.
Parliament Budget Session from Jan 31
It should be mentioned here that the budget session of Parliament will begin on January 31 and, according to schedule, will end on April 4. The budget will be presented on February 1. President Droupadi Murmu will address the joint sitting of both houses of Parliament on January 31. Parliament will have an inter-session break from February 14, and the two Houses will resume their sittings on March 10.
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