Budget 2022: What Can Real Estate Sector Expect From Upcoming Union Budget? Experts Decode

Union Budget 2022: Dr. Niranjan Hiranandani, Vice Chairman, NAREDCO and Shri. Sandeep Runwal, NAREDCO on what the real estate sector expects from the union budget 2022-2023.

Real Estate Sector Expect From Upcoming Union Budget: The real Estate Industry expectation from Budget 2022-23 looks forward to policy stepping up measures, impetus to affordable and rental housing, and stimulus for demand generation, job creation and tax rationalization. It is anticipated to address critical issues that ensure sustainable economic growth momentum and foster investment climate in the Indian Real Estate sector. In conversation with Dr. Niranjan Hiranandani, Vice Chairman, NAREDCO and Shri. Sandeep Runwal, NAREDCO on what the real estate sector expects from the union budget 2022-2023.

The recommendation underscores measures that would primarily address issues that will result in higher disposable income in the hands of the consumers. The wish lists are appended as follow-

· Individual Tax should be reduced from 42 per cent to 25 per cent.

· The ban imposed on subvention schemes should be uplifted. The ban does not favour home buyers, a large segment of these do not have the capacity to pay both, EMIs on their under-construction home loans as well as house rent.

· Long Term Capital Gains: Long term Capital gain from sale of House property should be taxed at 10 per cent (provision similar to section 112 for equity shares). Also, the period of holding of house property should be reduced to 12 months from existing 24/36 months to qualify the same as Long Term Capital Asset.

· Objective of Housing for All envisages a role for Rental Housing stock to be created. To do so, ‘Notional Income’ from House Property held as stock in Trade – Section 23(5) – needs to be removed.

· Similarly, rent should not be taxed for the first 5 years from date of completion to incentivize ‘buy to rent’

· Increase standard deduction in Rental housing up to 50% and incentivize service rental apartments by allowing Accelerated depreciation

· Deletion of dual taxation in the provision Sec 43 CA\ 50 C to rationalize the difference between ready reckoner rate and market value which cause high transaction value of homes for the customers.

· Income Tax deduction on home loans should be extended up to to Rs 5 lacs to benefit home buyers.

· Expand the definition of Affordable housing in metro cities by extending the price cap up to Rs 1 crore, extend benefits of CLSS and PMAY schemes for first time homebuyers and amend Sec 80 IB A to extend affordable housing development benefits to all the projects registered in RERA between 1st June 2015 to 31st March 2023.

· Liquidity stimulus by enhancing the quantum of SWAMIH Fund up to Rs 1.25,000 crore to resurrect the stalled projects and permit External Commercial Borrowing in real estate.“Corroborated measures should be announced to augment the sustainable growth of the Indian real estate sector which also has a multiplier effect on 270 allied industries fostering economic growth inclusive of job creation. Budget stimulus bolstering consumption driven economy will help achieve the target of $ 5 Trillion economy and further arrest any downturn in the economy.