Real Estate Expects Big Measures from the Union Budget 2021

The upcoming Union Budget slated to announce on 1st February 2021 has anticipated the announcements and reforms to augment the business activities across the sectors. The real estate sector is pinning hopes on the Union Budget that might push expediting the sector’s growth to the pre-COVID level growth figures. There is widespread speculation that the government would bring incentives to promote manufacturing activities in the country. With expectations of appropriate, innovative, and path-breaking measures, industry players express their concern for the government to consider and acknowledge in the Budget.

Mr. Anuj Kumar Garg, Vice President-Customer Engagement & Distribution, Viridian RED said, “The aggressive push to the industrial and manufacturing sector will help strengthen the backbone of the real estate sector. The government must consider setting-up dedicated clusters, export zones, and tax incentives reinforcing an advanced ecosystem. Simultaneously, rationalizing the GST structure along with the reduction in input credit, stamp duties, and registration charges will give much-needed thrust to the real estate sector. We also look forward to the government considering the single-window clearance mechanism for the real estate sector.”

Mr. Pankaj Bansal, Director, M3M, said, “It is of utmost importance that the government should consider the exemption extension under section 80 C to invest in REITs starting with Rs. 50,000. Moreover, a hike in tax rebate from Rs. 2 lakh to at least Rs. 5 lakh on housing loan interest rates under section 24 of the Income Tax Act is expected to increase demand in the housing segment in 2021.” 

To stimulate the growth of the housing sector, the real estate sector is looking forward to the upcoming budget to announce a plethora of measures. 

 “We expect the Union Budget 2021-22 to grant industry status to real estate that has been a longstanding demand of the entire fraternity. There is a need, however, to revise the limit for affordable housing from INR 45 lakhs to INR 60 lakhs as most of the houses in metropolitan cities such as Delhi-NCR and Mumbai-MMR does not qualify in this category, resulting in loss of 1% GST benefit. At the same time, measures such as increasing the allocation to Special Window for Completion of Construction of Affordable and Mid-Income Housing Projects (SWAMIH) will infuse liquidity and revive stalled projects,” said Mr. Shashank Vashishtha, Executive Director – Exp India.

Mr. Mohit Goel, CEO, Omaxe Ltd. said, “The government must accelerate investment in infrastructure development in State Capitals and tier 2/3 cities so that these cities can emerge as the alternative centres for business and employment. The government must encourage private sector investment in these cities by opening avenues and providing tax breaks and incentives in areas like real estate, IT, BPOs, retail, banks, etc. Metro Rail, expressways, multi-land use projects, integrated townships, commercial and residential redevelopments are some of the areas the government must look towards.”     

“Measures like increasing the tax deduction under Section 80C of the Income Tax Act for principal repayment on home loans will boost sentiment. Personal tax relief, either by tax rate reductions or amended tax slabs, is also the need of the hour. Additionally, the Central and state governments must work in tandem to reduce GST, stamp duty and circle rates that will decrease the cost of owning home. Furthermore, the sector expects GST waiver for under-construction properties in the housing sector. These reforms will push the demand and infuse liquidity into the segment,” said Mr. Mukul Bansal, Director, Motia Group.

Mr. Amarjit Bakshi, CMD at Central Park said, “Fulfilling the long-pending demand of granting industry status to the sector will aid economic growth. Streamlining of GST and reintroduction of the input tax credit will further ease the liquidity crunch, securing seamless construction activities at the project sites.”

“We are expecting lower interest rates in home loans to create an improved demand, most likely in the mid-housing segment. The industry also demands the extension of benefits under section 80EEA to all homebuyers,” said Mr. Santosh Agarwal, CFO and Executive Director, Alpha Corp.