With the Union Budget 2023-24 around the corner, experts across sectors are hoping for incentives and benefits that will make it easier to run their businesses. Even though the real estate sector had a decent run in 2022, overcoming the pandemic-induced rough time of the previous years, there are many critical demands that the sector has put forward ahead of the Budget presentation scheduled for February 1.
On the demand side, experts want government to take measure that will bring liquidity to the taxpayer. “The government should raise the deduction limit for interest payment on home loans from the existing Rs 2 lakh a year to Rs 5 lakh which will add momentum to housing demand, particularly in the affordable segment,” said Ramani Sastri, Chairman and Managing Director, Sterling Developers.
Sastri added that the capital gains tax rate should be reduced from 20 per cent and asked for the removal of the Rs 2 crore cap on capital gains for reinvesting in two properties. In a similar vein, there is a demand for more tax sops and higher relief on the home loan rates to ensure requisite capital flow in the sector.
“There is specific need for income tax relief on a second home which will benefit home buyers in a big way and also stimulate the real estate sector. The budget can also support the industry by ensuring reduction in compliance issues and with measures related to ease of doing business. It should also strengthen the existing financing systems to provide liquidity as developers need a rational capital flow to keep up the work process,” said Lincoln Bennet Rodrigues, Chairman and Founder, The Bennet and Bernard Company.
He added that the industry is hoping for GST reforms as this will reduce overall property cost and push demand for homes. Co-working firms also expect key changes around GST and taxation in Budget 2023.
“Input tax credit under GST is an important issue that concerns co-working sector. We expect the budget would enable coworking firms to claim input credit on work contract and construction services supplied so that it is passed on to companies who lease out space for coworking and thereby reduce their overall costs. This would significantly aid faster growth of coworking business in the country,” said Manas Mehrotra, Founder of 315Work Avenue, a leading coworking firm.
Sudhir Pai, CEO Magicbricks said, "Since residential demand remains high and unmet, the upcoming Budget presents a two fold opportunity. Firstly, to aid developers in delivering under-construction projects by providing access to affordable loans which would improve cash-flow. Secondly, since increasing construction costs have increased property rates by 14 per cent across cities on an average, there is an opportunity to benefit homebuyers and developers alike, by increasing the price band for affordable housing. These provisions would unlock value for the residential sector and continue to fuel both demand and supply in the economy says."