Realty sector expects Budget to make things better

Mumbai: Indian Real estate is set to see robust growth in the coming decade. But to achieve this, there are many aspects which need support in terms of policy and implementation at ground level. For the 'affordable' segment, we expect more support to ensure the Prime Minister's dream of 'Housing for All' becomes a reality.

Talking to Bizz Buzz, Gautam Thacker, Chairman, Naredco Neral Karjat Unit, says, "In locations which support industry which is 'carbon neutral', we expect the Budget to provide incentives, so that 'policy decisions' get implemented at ground level - which would translate into Job creation, effectively giving a boost to the economy of such regions – Neral – Karjat being one such region."

At the National level, as per predictions of Niti Aayog, Indian real estate will touch the figure of $1 trillion and will contribute 18-20 per cent of the GDP by 2030, he said. Secondly, India's urban population is expected to touch 43.5 percent of total population by 2035.

According to him, "When we put together both these factors, it creates a future scenario of very positive prospects for real estate in India." The key challenges facing real estate are: availability of credit, complexities in land and approvals, availability of resources and skilled labour, high tax regime including local taxes and premiums. Real estate is subject to taxations at all levels, many representations have been made to the government from time to time by the industry and we are positive that the authorities have understood the challenges and they are also on same page, he said. This budget we expect a lot of solutions for these issues that these will be addressed and the Real Estate sector will have smooth operations. The major tax announcements that we look forward to include allowing input tax credit to the real estate sector, reduction of GST in key materials like cement, allowing higher deduction on housing loan interest to the end users, and removal of deemed taxation provisions for taxing unsold inventory and rentals in case of buyers. The RBI has been facing the challenge to control the growing inflation on an immediate basis. Taking a mid-term perspective, we are confident that the Finance Minister will take a balanced approach while tackling inflation, so as to not hamper the economy's growth – which should be positive for real estate, he added. It's a tricky proposition, but achievable.

Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Treasurer, Credai-MCHI, said, "The year 2022 saw an amazing revival of the real estate sector with excellent property sales being recorded across housing segments. The industry hopes to continue with the same tempo in the year 2023 as well."

We look forward to the Finance Minister granting industry demand of increasing the tax slab up to Rs 5 lakh from present Rs 2 lakh per annum, against interest rate deduction under section 24(b) of the Act, he said. Property rates in metro cities are very high and out of reach for most home buyers in the lower property segment. Revising the cap from 45 lakh to 1 crore in metro cities, for home buyers availing the credit link subsidy scheme will immensely benefit customers in the affordable housing category and make housing more accessible to them.

The government should introduce tax sops for first-time homebuyers and re-introducing GST with an input tax credit on under-construction properties that will reduce property rates thereby generating demand among homebuyers.

The government should consider expanding the SWAMIH Fund which will not only ensure completion of stressed projects but will also broaden the scope across property segments and assist developers of stressed projects in delivering them on time too to the home buyer. This will ultimately boost the confidence of the homebuyers, he said.

The real estate sector is looking at continuation of a robust housing demand in 2023 and developers expect the government to play a more constructive and supportive role. A robust housing sector will complement infrastructure development and will be a catalyst to the growth of the economy as well.