Flat for sale board catching your attention too often? Is it the right time to buy a home? What does budget say about the sector?

It is evident that the revival of sentiment in the residential real estate sector can be attributed heavily to policy support, either by the government or the RBI. Things like favorable repo rates, low interest rates on home loans, stamp duty cuts and extension of tax benefit on affordable housing are some of the policy measures that have a given a boost to the housing market.

Besides persistent demands of industry status, reduction on GST rates and ease of availability of finance, following are the areas where the sector look forward to from the upcoming budget:

Taxation (Loss from house property deductions)

Currently, home loan interest rates are between 6.5 to 7 percent per annum. However, homebuyers who are looking to get a loan of more than Rs 30 lakh can’t claim the entire interest paid in the initial years as per the Rs 2 lakh per annum cap on the tax exemption under section 24(b). If the limit is pushed from 2 lakh to 5 lakh per annum, it could trigger a healthier home buying demand for both affordable and mid-segment.

Definition of affordability to be market linked

The standardization of price segment across cities does not seem viable considering the huge disparity that exists in the housing prices. If the budget can form categories and sub-categories for a much practical definition of affordability, then the benefits outlined for the affordable segment can be availed across geographies.

Stamp duty Reduction

We have seen the benefits of stamp duty reduction in Maharashtra and Karnataka. Therefore, if this can be replicated in other states, fence-sitters would be able to quickly take the plunge and would benefit the sector.

Industry status

It is time that real estate sector is awarded the industry status so that it can help the industry stakeholders avail credit from financial institutions at competitive rates. The developer community has also taken the brunt of COVID due to labor shortage, temporary shrunk demand, and inflation on input costs, therefore GST reductions on the raw materials can be of great relief for them.

Liked reading the blog?

For more interesting insights like these,

Order your must have copy of the best real estate book in India – “The A to Z of Residential Real Estate” by Ashwinder R Singh.