Last Updated: January 11, 2023, 15:09 IST
Following a slump during the COVID-19 pandemic, the housing sector saw good growth last year. An Anarock Research analysis claims that residential property sales in 2022 surged by more than 50% as compared to 2021. However, the housing market is not expected to do well well in 2023.Hence, the role of budget becomes crucial this time. Budget 2023 can give relief to the industry by providing a little degree of intervention, for both- buyer and seller.
According to real estate analyst Atul Monga, the real estate and home loan sectors are crucial to the Indian economy, but they are currently going through a troubled phase. This is a result of rising interest; thus lenders must provide loans with alluring interest rates. In addition to this, industry insiders anticipate 5 other budget announcements that may help the business.
The real estate and home loan industries are projected to be significantly impacted by the increase in interest rates. The buyers are worried about rising interest rates. The government needs to take steps like increasing the tax exemption on housing loan interest to Rs 5 lakh under section 24(b).
Changes in home loan rules
Anuj Sharma, the chief operating officer of mortgage finance company IMGC, asserts that to make house loans more affordable, interest rates must be reduced. Even though loan rates are determined by the RBI’s policy rates, he said that the budget might help homebuyers by relaxing some regulations, such as lowering the minimum down payment requirement.
Change in Affordable Housing Limit
Experts believe that the current price band of Rs 45 lakh for a property considered under affordable housing is not appropriate in most cities in India. It should be increased to Rs 75 lakh or more.
Relief in GST
The existing GST structure for inexpensive and under-construction homes place additional burdens on developers, increasing the price of units for purchasers. Although there are 18% and 28% GST on steel and cement, developers cannot claim a tax credit for the GST they paid on the input materials. Experts said that if the government includes a statement restoring the input tax credit in this year’s budget, it might ease the financial pressure on developers.
According to Anil Pharande , President of Pharande Spaces and CREDAI Pune-Metro, the Indian rental housing sector is still in its infancy. By providing tax benefits to developers, who are building rental housing developments, the government can promote this sector.
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