The Indian real estate sector is urging significant reforms and industry status in the upcoming Union Budget 2025. Key stakeholders believe these changes will enhance the sector’s growth and development. As the backbone of India’s economy, real estate plays a crucial role in job creation and investment opportunities. Industry experts and leaders are advocating for streamlined approvals, rationalization of Goods and Services Tax (GST), and policies that support sustainable and affordable housing. Pradeep Aggarwal, founder and chairman of Signature Global India, asserts that granting industry status would invigorate more than 200 allied sectors and create numerous job opportunities. He emphasizes the need for affordable funding and simplified regulatory processes to stimulate growth. Furthermore, tax reforms and financial incentives are critical areas of focus, with calls for increased exemptions on home loan interest and principal. The real estate sector’s demands also encompass rental housing policies and commercial real estate taxation clarifications. Stakeholders believe that these reforms will not only boost demand but also enhance the overall affordability of housing in India. As the Union Budget approaches, the anticipation grows around how the government will address these vital requests to strengthen the real estate landscape in India.
Industry Status and Financial Reforms
The demand for industry status has been a long-standing issue within the real estate sector. Advocates argue that this recognition would not only facilitate affordable funding but also streamline various regulatory processes. As Pradeep Aggarwal suggests, industry status would amplify economic activity, making it a cornerstone of India’s growth trajectory. Furthermore, Murali Malayappan, chairman of Shriram Properties, highlights the necessity of rationalizing GST rates for under-construction properties, stating that this adjustment would significantly benefit developers and enhance market stability. In addition, experts like Manish Mehan, CEO of TK Elevator India, emphasize the importance of enhanced tax reliefs and increased funding opportunities to unlock the sector’s full potential. Policy reforms are also crucial, with experts advocating for the reintroduction of Section 80IBA incentives, which would stimulate affordable housing development. G Hari Babu, national president of NAREDCO, stresses that restoring interest subvention under PMAY for loans up to Rs 6 lakh would greatly benefit buyers. These reforms are seen as essential steps to revitalize the real estate sector, enabling it to meet the growing housing demand across various segments.
Tax Reforms and Housing Demand
Tax reforms are at the forefront of the real estate sector’s expectations for the upcoming budget. With housing loan interest rates remaining stagnant for years, stakeholders are advocating for increased exemptions on home loan interest and principal. Aggarwal suggests that revising the tax exemption limit on housing loans to Rs 5 lakh would provide significant relief to homebuyers, thereby boosting demand across the sector. Dhruv Agarwala, group CEO of Housing, echoes this sentiment, urging the government to ease the financial burden on homebuyers by raising the tax exemption limit. Anshuman Magazine, chairman and CEO of CBRE India, emphasizes the need for tax incentives for Real Estate Investment Trusts (REITs) and simplified funding access for developers, which could inject much-needed liquidity into the market. Additionally, rental housing policies require significant reform to improve affordability and attract investments. Niranjan Hiranandani, chairman of NAREDCO, advocates for the elimination of notional income tax from house property held as stock-in-trade, which currently disincentivizes rental housing investments. These proposed tax reforms aim to create a more favorable climate for both buyers and developers, ultimately driving growth in the real estate sector.
Conclusion
As the Union Budget 2025 approaches, the Indian real estate sector stands poised for transformative changes. The call for industry status and tax reforms reflects a collective desire for enhanced growth and sustainability.
- Industry status could invigorate over 200 allied sectors.
- Rationalization of GST rates is crucial for under-construction properties.
- Increased tax exemptions would ease financial burdens on homebuyers.
- Policy reforms are needed to stimulate affordable housing development.
- Rental housing policies require urgent reforms for better investment.
- Anticipation mounts for the government’s response to these demands.
