Elimination of Indexation Benefits:

One of the most significant changes is the elimination of indexation benefits for property sales. Previously, sellers could adjust the purchase price of a property for inflation, reducing taxable capital gains. This benefit’s removal aims to simplify the tax process but could increase the tax burden on sellers. This change is expected to influence investment decisions and could potentially reduce the number of property sales due to higher tax implications(ClearTax Chronicles).

Revival of Affordable Housing:

To revitalize the affordable housing sector, which saw a decline post-COVID-19, the budget proposes the reinstatement of the Credit-linked Subsidy Scheme (CLSS) under PMAY.Additionally, developers may receive 100% tax holiday benefits to stimulate both demand and supply in this segment (India Budget).

New Housing Scheme for the Middle Class:

The government has announced a new housing scheme specifically targeting the middle class. This initiative aims to address the housing needs of this demographic, enhancing the availability of affordable housing options.

Tax Incentives and Infrastructure Upgrades:

Industry leaders have advocated for significant tax reforms. Anshuman Magazine, Chairmanand CEO of CBRE, suggests raising the interest deduction limit under Section 24B on housing loans to ₹5 lakh per annum and introducing tax incentives for Real Estate InvestmentTrusts (REITs). Ramani Sastri, Chairman and MD of SterlingDevelopers, echoes this sentiment, proposing an increase in the deduction limit for interest payments on home loans and GST reductions on under-construction properties(Fortune India).

GST Rationalization:

The real estate sector anticipates rationalization of GST rates, particularly reducing GST on
construction materials like cement and marble. This could lower the cost of homes and make
them more affordable. Additionally, there is a push for allowing real estate players to avail
input credit during the construction phase to help reduce costs (PWC).

Industry Status for Housing:

Granting ‘industry status’ to the housing sector remains a key demand. This status could
catalyze growth and attract more investment, boosting the overall development of the real
estate market .

Promoting Green Realty:

The budget also focuses on promoting sustainable real estate. Provisions for energy
transitions, green infrastructure, and affordable sustainable housing are expected. There is a
strong emphasis on zero-carbon emission initiatives and supporting innovations in green
technologies.

Conclusion:

The Union Budget 2024-25 introduces comprehensive reforms aimed at making housing more affordable, boosting investments, and promoting sustainable development in the real estate sector. These measures are expected to have a lasting impact, reshaping the landscape of Indian real estate for years to come.