Budget 2024 gives a boost to affordable housing, lays groundwork for sustainable development – Money News

The Union Budget 2024 on Tuesday introduced several noteworthy measures that could significantly impact the real estate sector. It put its focus on infrastructure development, with a substantial allocation of Rs 2.66 lakh crore for rural development and housing under the PM Awas Yojana.

“This initiative, aimed at constructing 3 crore additional houses, will likely boost the housing market, especially in rural and semi-urban areas, making homeownership more accessible to a larger population. Additionally, the proposed reduction in stamp duties by states and the further reductions in duties for properties purchased by women are steps in the right direction. These measures are expected to drive demand and foster inclusive growth in the sector. The Finance Minister announced that long-term capital gains on all financial and non-financial assets will attract a tax rate of 12.5%. Additionally, the limit of exemption for capital gains will be set at ₹1.25 lakh per year, which is expected to encourage more investments in real estate,” said Priyesh Chheda, Founder, Arbour Investments.

During the budget announcement, Finance Minister Nirmala Sitharaman announced a total budget of Rs 10 lakh crore, with the Central government contributing Rs 2.2 lakh crore over the next five years under the Pradhan Mantri Awas Yojana-Urban. The goal is to assist one crore families among the bottom of the pyramid and lower middle-income groups in meeting their housing requirements.

Gold ETFs: Take the SIP route for higher returns

Budget 2024 brings promising changes to real estate sector

Increase SIP amounts by 8-12% every year: PPFAS Mutual Fund CIO Rajeev Thakkar

Best Fixed Deposit interest rates for Senior Citizens ahead of Budget 2024

Atul Monga, CEO & Co-Founder, BASIC Home Loan, said, “PMAY-U’s new section concentrates on an enormous phase of the city populace to enhance their dwelling standards. It is designed to provide less luxurious housing answers, thereby addressing the disparity of most of the supply and demand for houses in urban regions efficiently. Moreover, the government is considering a public-personal partnership version that might bring about the advent of dormitory-fashion rental housing for manufacturing unit personnel. This strategic flow is anticipated to mitigate the urgent difficulty of worker housing shortages by way of the use of organising price-effective residing regions in proximity to business zones.”

Also Read: Budget 2024: Tax slab changes, Standard Deduction hike to Rs 75K enhance New Tax Regime’s appeal among taxpayers

The Finance Minister’s decision to remove the indexation benefit for long-term capital gains (LTCG) tax on real estate marks a significant shift for the sector.

“While the intention to simplify and rationalise the tax regime is clear, the removal of the indexation benefit, despite the reduction in the LTCG tax rate to 12.5%, could lead to a higher tax burden on real estate transactions,” said Dhruv Agarwala, Group CEO, Housing.com & PropTiger.com.

Additionally, “the government plans to promote homeownership by encouraging states to reduce stamp duty rates, particularly for women. This could significantly reduce the cost of property acquisition in India, a country where stamp duty rates are one of the highest in the world. The proposed changes in the GST law, an increase in standard deduction under the New Tax Regime and the rationalisation of the tax structure are some of the other key measures that would enable India’s salaried class to have more disposable income, consequently boosting housing demand in the country,” added Agarwala.

“The Budget 2024 rightly focused on critical economic pillars like urban housing and infrastructure development. The allocation of Rs 10 lakh crore under the PM Awas Yojana-Urban 2.0, which aims to fulfill the housing requirements of 1 crore poor and middle-class families, will provide a substantial boost to the real estate sector. In addition, the reduction in stamp duties for women will empower a large segment of the population to invest in real estate, promoting gender inclusivity and financial independence. These progressive measures not only support the immediate housing and infrastructure needs but also lay the groundwork for a more inclusive and sustainable urban development,” said Amrita Gupta, Director of Manglam Group and Founder President of CREDAI Rajasthan Women’s Wing.

Aditya Kushwaha, CEO and Director, Axis Ecorp, also said that the allocation of Rs 11.11 lakh crore for capital expenditure, representing 3.4% of India’s GDP, clearly reflects the government’s robust commitment to infrastructure enhancement.

“The focus on the PM Awas Yojana-Urban, with a substantial Rs 10 lakh crore earmarked to meet the housing needs of one crore poor and middle-class families, is particularly praiseworthy. Govt’s move to encouraging states to moderate high stamp duty rates will make housing more accessible and affordable. By simplifying the FDI norms, govt has given a window to promote the use of the Rupee for overseas investments. These comprehensive measures will invigorate the real estate sector, drive demand, and foster a more resilient economic environment,” Kushwaha added.

As the budget targets to meet the housing needs of 1 crore poor and middle-class families, it is expected to boost the affordable housing segment and create millions of jobs in the process.

“The allocation of Rs 11.11 lakh crore for infrastructural development, along with the innovative PPP model for rental housing in urban centers and the strategic push for transit-oriented development showcases a forward-thinking approach. These initiatives will undeniably propel real estate development in the right direction. Moreover, the reduction in stamp duty for women buyers will help build an inclusive real estate market. In essence, the budget represents a strategic economic boost, ensuring India’s macro growth remains resilient amid global uncertainties. By prioritizing key sectors such as skilling, urban development, and infrastructure, this budget injects crucial energy and momentum into the economy,” said Mohit Goel, Managing Director of Omaxe.

Amarjit Singh Bakshi, Chairman and Managing Director, Central Park, said, “The allocation of Rs 11.11 lakh crore for infrastructure development, comprising 3.4% of India’s GDP, will definitely drive growth and connectivity, positively impacting the housing market. Government’s focus on maintaining a strong fiscal support for infrastructure projects for the next 5 years will also drive it forward. These budgetary measures are also expected to generate high-value employment and support over 200 ancillary industries, reinforcing the sector’s critical role in the economy. Overall, we believe this budget sets the stage for a robust and sustainable growth trajectory for the real estate sector, benefiting all stakeholders. We remain committed to utilizing these favourable policies to deliver exceptional value and innovative solutions to our customers.”