Union Budget 2023 Wishlist for the Real Estate Sector in India

Another key area of focus for the real estate sector is affordable housing. With the increasing cost of living and rising real estate prices, many people are struggling to find affordable housing options. The government is expected to announce new initiatives and funding for affordable housing projects to make them more accessible to a wider range of people.

Atul Banshal, Director Finance, Omaxe Ltd. said, "The budget should consider reducing stamp duty as that will assist it in resuming a robust real estate market and complete housing for all missions for the Central Government. The government must consider increasing the tax rebate on home mortgage interest from Rs. 2 lakh to at least Rs. 3 lakh. It is also necessary to have separate deductions for principal repayments, which are currently included under Section 80(c). It should also be raised from the current limit of Rs. 1.5 lakhs to Rs. 3 lakhs. Currently, there are no regulations governing brokerage fees; neither the buyer nor the developer is required to pay the required commission on each transaction. Consequently, collecting the existing 18% GST rate on brokerage services falls solely on realtors. Thus, real estate brokerage services must be brought on par with other service providers by lowering the GST rate to a more manageable 5% as this tax cut could encourage more realty agents to join the tax system, benefiting the governments revenue collection."

The sector also expects the government to increase the SWAMIH fund from Rs. 5,000 crore to Rs. 50,000 crore to unlock vast investment opportunities in the residential segment.

"The government should rationalise GST rates for construction materials like steel, cement and tiles. Additionally, the government should put aside more funds under the stress fund SWAMIH. Policies should be relaxed, or scope of policy should be widened so that stuck projects can be completed. Subsidy under the Credit Linked Subsidy Scheme (CLSS) has been a big saving and motivation and should be continued to achieve the "Housing for All" mission. Hence, we look at this scenario with pragmatic optimism and approach the market with a bullish perspective," said Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd.

The realty sector is looking forward to an increase in the tax rebates, policy reformation, receiving industry status, and the long-awaited single window clearance.

Abhishek Trehan, Executive Director, Trehan Iris said, "The project financing interest rates should be regulated, which are currently 7-8% above even home loan rates. Therefore, not only the rate of interest be reduced on project financing, but also a real estate-focused government fund should be provisioned for flexible access to capital at a minimal rate of interest. Retail space and mall developers are expecting holistic support from the forthcoming budget. The growth potential of the retail sector can be leveraged only with the help of upgraded infrastructure, better connectivity, and appealing announcements attracting investment. Simultaneously, the upcoming budget should continue to emphasise measures to boost consumer spending and investment."

In addition, the real estate sector is hoping to see increased investment in infrastructure and transportation systems. This can help improve the accessibility and livability of real estate markets, making them more attractive to potential buyers and investors.

"It is critical that the government considers expanding income tax benefits in order to make them more lucrative. We expect the maximum tax rate of 30% should be reduced to 25% to improve the buying power of the individuals and Interest rate saving Cap should be increased from the present 2.5 L to 5 L. We also expect the administration to respond to calls for a single-window clearance system. We are optimistic that the government would shape its policy actions to promote real estate demand even further this year," said Santosh Agarwal, CFO and Executive Director, Alpha Corp.

Overall, the real estate sector is hoping for a budget that will help create new opportunities for investment and growth, and improve the quality of life for millions of citizens. Whether these expectations will be met remains to be seen, but the industry is hopeful that the Union Budget 2023 will provide a much-needed boost to the sector and help it reach new heights.