Expert Opinions on Union Budget 2024-25’s Impact on Real Estate Sector
The recently announced Union Budget 2024-25 has garnered mixed responses from experts in the real estate sector. While some appreciate certain aspects of the budget, others feel that it falls short of addressing the industry’s core challenges. Let’s explore what key industry players had to say about the budget and its potential impact.
Digitization of Land Records and the Need for GST Rationalization
Aravind Maiya, CEO of Embassy REIT, hailed the government’s step towards digitizing India’s land documentation system, considering it a game-changer for the real estate sector and the broader economy. He emphasized the importance of transparent and accessible land records in facilitating property transactions, reducing disputes, and attracting investment.
However, Maiya also highlighted some critical aspects that remain unaddressed. One such aspect is the need for GST rationalization in the real estate industry. The industry has long been demanding this change, which would facilitate easier access to funding.
Affordable Housing Deduction and Infrastructural Impetus
Murali Malayappan, Chairman & MD of Shriram Properties, expressed his positive view on the increase in the deduction for interest paid on loans for affordable housing. He believes that this change will provide much-needed relief to homebuyers and boost the real estate market.
Similarly, Domnic Romell, President of CREDAI-MCHI, highlighted the impact of sustained infrastructure impetus, particularly the Rs 11.11 lakh crore allocated for capital expenditure (Capex). He anticipates that these investments will create a multiplier effect and significantly boost the overall housing sector.
Efficient Urban Planning and Industrial Corridor Initiative
Venkatesh Gopalakrishnan, Director of Group Promoter’s Office, MD & CEO of Shapoorji Pallonji Real Estate SPRE, praised the budget’s comprehensive focus on efficient urban planning. The inclusion of transit-oriented development and enhanced infrastructure for water supply, sewage, and waste management in 100 large cities is expected to elevate the quality of urban living.
Manas Mehrotra, Founder of 315Work Avenue, highlighted the potential real estate opportunities that could arise from the development of industrial parks in 100 cities under the Industrial Corridor initiative. These developments may lead to the growth of commercial and residential properties in those areas.
TOD Development and Better Administrative Services
Anshul Jain, CEO – India, SE Asia & APAC Tenant Representation at Cushman & Wakefield, expressed expectations for announcements related to the fund allocation toward Smart City Mission 2.0. Jain also emphasized that the development of transit-oriented development (TOD) in 14 large cities would create industrial and commercial hubs in those areas. He also appreciated the digitalization of land records in urban areas with geographic information system (GIS) mapping, which would enhance transparency and provide better administrative services.
Fulfilling Key Demands and Boosting Consumption
Anurag Mathur, CEO of Savills India, highlighted some unaddressed demands of the real estate sector such as granting industry status, input tax credit, and reduction of GST. In addition, he noted that the marginal increase in savings on individual income tax in the new taxation regime may fall short of investors’ expectations. Mathur urged the government to reconsider its focus on the real estate sector to include these demands.
On the other hand, Anuj Puri, Chairman of ANAROCK Group, commended the budget for its comprehensive approach toward job creation and boosting consumption. He sees these developments as positive drivers for the real estate sector.
The Impact of Taxation Simplification on Real Estate
Archana Tewary, Partner at JSA Advocates and Solicitors, acknowledged the government’s intent to simplify taxation but expressed concerns over the change in regulations related to real estate assets. While the reduction in long-term capital gains tax rate is welcomed, the removal of indexation benefits may adversely affect sellers. Tewary also mentioned that such a change could reduce demand for residential real estate projects.
The Union Budget 2024-25 has sparked diverse opinions within the real estate sector. While some experts praise the digitization of land records, improvements in urban planning, and tax deductions for affordable housing, others call for specific reforms like GST rationalization and the fulfillment of industry demands. Only time will tell how the budget’s provisions translate into tangible outcomes for the real estate industry.
