EU Budget 2024 raises hopes for real estate reforms – Money News

The Union Budget 2024 is not called the ‘Budget of Hope’ for nothing. Amidst economic volatility and cost challenges, this budget marks a significant step forward by introducing key reforms and increased funding that promise to change the landscape of the real estate industry.

The budget introduced a number of key reforms, addressing long-standing issues in the sector while also pushing for growth and development. However, real estate developers and investors are cautiously optimistic and are closely watching how these reforms are implemented.

One of the most significant changes is the reduction in long-term capital gains tax. This move, aimed at simplifying the tax structure, comes with a trade-off: removing the indexation benefit. While this may initially raise some concerns among investors, the overall impact is expected to boost market activity. The ambitious plan to build 3 crore additional houses in urban and rural areas is a testament to the government’s commitment to affordable housing. This initiative, coupled with the Urban 2.0 programme investing Rs 10 lakh crore for 1 crore urban families, offers a glimmer of hope for the working class as well as developers. However, the industry would be skeptical about the intensity of the impact of these measures on developers.

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Urban development has a central place in this budget, with the Ministry of Housing and Urban Affairs (MoHUA) seeing a significant increase in allocation from Rs 69,270.72 crore in fiscal 2023-24 to Rs 82,576.57 crore in fiscal 2024-25. This increase underlines the government’s vision that cities are growth hubs and urban development is a key priority. As part of its drive towards inclusiveness, the budget announces cuts in stamp duty and special considerations for women homeowners. This progressive step is expected to open up new market segments and encourage wider participation in property ownership. Digitisation is emerging as a key theme, with the implementation of Geographic Information Systems (GIS) set to revolutionise the transactions between buyers and builders. The allocation of Rs 1,150.02 crore for the National Digital Urban Mission further underlines the government’s commitment to modernising the sector.

Despite these positive developments, the long-standing demand of the real estate industry for an ‘industry status’ remains unaddressed. The lack of such recognition, along with the lack of GST rationalisation, continues to pose challenges in offering competitive prices to buyers. Many industry experts say that granting industry status could be the key to unlocking the full potential of the sector.

Looking ahead, the Union Budget 2024 sets a hopeful tone for the Indian real estate market. While it fell short on all fronts, it has certainly laid the foundation for significant growth and development. Ambitious housing initiatives and a focus on urban development paint a promising picture, but there is still room for further dialogue on policy reforms.

The coming months will be crucial as the industry adapts to these changes and continues to push for additional reforms. For now, real estate stakeholders can take heart from the government’s clear signal of support and commitment to progress. The journey towards a fully reformed and vibrant real estate market continues, budget by budget.

(by Naveen Gadde, Founder & CEO, Navanaami)

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