Budget 2023: Real Estate sector expects raising tax deduction limit for home loans

The Union Budget is almost knocking at the doors for the years 2023–24, and in the minds of various industry leaders there are high waves of anticipation and hope. The finance minister, Nirmala Sitharaman, is all set to unveil the union budget for the fiscal year 2023–24 on Wednesday, February 1st, in Lok Sabha at 11 a.m. Another major thing to keep in mind is that the upcoming budget is the last budget of the Modi government’s second term, as the Lok Sabha elections are set to be held next year. Therefore, some vital announcements are expected to be made by the government. As it is the most nail-biting time of the year for various industry leaders from real estate as well as from other sectors, salaried class, jobs, etc., all hopes are attached to the upcoming budget.

The year 2022 was a landmark year for the real estate sector in India, as there was a 50% surge in residential housing sales compared to the year 2021. So to keep up this momentum, the various leaders in the real estate industry are expecting the union budget to address certain challenges and hoping that the budget will prove to be a catalyst for the real estate industry. Certain challenges that must be addressed include rationalising the GST rates for brokerage services, granting the real estate sector industry status, stabilising interest rates, and financing the project, developers.

"Well, let's make it simple. This budget framework involves three key stakeholders: consumers (Janta), industry, and government. So, what's going on with these stakeholders as we approach this budget? The government had its bingo moment in terms of housing affordability and tax collections. The sector responded well to reforms like PMAY and GST reduction. The finance minister would love to see a continuation of it. Consumers are facing a bit of pressure due to rising interest rates and would like some relief. The industry is showing signs of life, but growth is uneven and unpredictable due to disruptions. We would like to get more support to keep investing in sector growth." Says Ashish Kukreja.-Founder and CEO of Homesfy,

He further states that "So our expectation/prediction based on the above framework is: Raising the tax deduction limit for home loans from ₹2 lakhs to ₹5 lakhs per year can be a good relief for consumers. Increasing the limit on affordable housing from 45 lakh to 65 lakh in big cities will also boost mid-segment housing. Though not connected directly, any infrastructure boost to connect city centres with the outskirts will help increase the sector's growth. They are widening the scope of NCLT and SWAMIH funds for faster resolution of stuck projects. GST reforms will make it easier for developers to pass on benefits to consumers. In short, the sector deserves a simple tax structure for all stakeholders. Let some parts of the wish list be on the waitlist for future budgets."

Consequently, these are some of the paramount expectations of the various leaders in the real estate sector. In just a matter of days, all the fog around the upcoming union budget for the year 2023–24 will be cleared, and people will get a clear picture of whether their expectations and hopes are fructified or dashed to the ground.