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Tag: Union Budget 2024-25

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Union Budget 2024-25: Residential and Commercial Real Estate Braces for Higher Taxes on Property Sales

Jul 25, 2024 by Mansi 0 Comments #Commercial Real Estate, #Higher Taxes, #Mr. Mohit Goel, #Property Sales, #residential, #Union Budget 2024-25

The Union Budget 2024-25 has introduced pivotal changes and strategic investments that promise to significantly impact the real estate sector. While the removal of indexation benefits for properties purchased after 2001 signals higher tax burdens for property sellers, the budget simultaneously unveils substantial allocations and reforms aimed at fostering growth and development within the industry.

Budget Highlights Impacting Real Estate

The budget has notably allocated Rs. 10 lakh crore under the PM Awas Yojana-Urban 2.0, targeting the housing needs of 1 crore poor and middle-class families. This landmark allocation is expected to boost the affordable housing segment and create millions of jobs. Additionally, Rs. 11.11 lakh crore has been earmarked for infrastructural development, with a focus on transit-oriented development and the innovative PPP model for rental housing in urban centers.

Industry Leaders React

Mr. Mohit Goel, Managing Director of Omaxe Group, praised the budget’s comprehensive approach: “Budget 2024 stands out for its people-centric vision and powerfully advancing affordable housing in urban areas with a landmark allocation of Rs. 10 lakh crore under the PM Awas Yojana-Urban 2.0. The allocation of Rs. 11.11 lakh crore for infrastructural development, along with the innovative PPP model for rental housing in urban centers and the strategic push for transit-oriented development showcases a forward-thinking approach. These initiatives will undeniably propel real estate development in the right direction.”

“In essence, the budget represents a strategic economic boost, ensuring India’s macro growth remains resilient amid global uncertainties. By prioritizing key sectors such as skilling, urban development, and infrastructure, this budget injects crucial energy and momentum into the economy,” he added.

Rajjath Goel, Managing Director, MRG Group, highlighted the sustainability focus: “The Union Budget has made an unequivocal statement about its commitment to sustainable urban development, with a sharp increase in finances for projects aimed at improving connectivity and the quality of life in cities. There is a robust framework brought out in the new budget for integrating renewable sources of energy into housing projects in urban areas towards modernizing cities and accommodating the growing urban population effectively.”

Mr. Harinder Singh Hora, Founder Chairman of Reach Group, reflected on the past year’s success and future opportunities: “The real estate sector witnessed a phenomenal year in 2024. Stable interest rates, ample supply, strong economic growth, and the government’s focus on infrastructure development all contributed to a significant boom. As we look towards the future, particularly with the retail sector poised for rapid expansion, ensuring commercial real estate policies that accelerate demand and growth which is further aligned with the government’s commendable goal of promoting entrepreneurship is crucial. Reducing GST on construction materials and implementing a single-window clearance system would be a significant step forward.”

Uddhav Poddar, MD, Bhumika Group, emphasized the impact on commercial real estate: “The emphasis on infrastructural development by allocating Rs. 11.1 lakh crores along with employment generation and skill development will boost real estate development and provide a fillip to the commercial segment. The promulgation of the PPP model for rental housing in urban centres, along with transit-oriented development (TOD), will also promote real estate development.”

Prasoon Chauhan, Founder & CEO, Aurika Homes, focused on affordable housing and infrastructure: “A key highlight of the Union Budget 2024 is the allocation of ₹10 lakh crore to urban housing, which will significantly advance affordable housing and address the needs of middle-class homebuyers. Additionally, the recommendation for state governments to reduce stamp duty is commendable, providing substantial relief to millions of buyers by lowering registry costs.”

Gurpal Singh Chawla, Managing Director, TREVOC, praised the budget’s vision: “The budget embodies a powerful vision for India’s future growth, and we are thrilled to see the government’s strategic focus on infrastructure development, job creation, youth skilling, MSME support, and urban housing. The government’s proposal to reduce stamp duty is a game-changer, offering significant relief to millions of buyers by reducing registration costs. This important move will undoubtedly fuel demand and invigorate the sector, sparking a new wave of growth.”

While the removal of indexation benefits for properties purchased after 2001 introduces higher taxes for sellers, the Union Budget 2024-25 provides a balanced approach with substantial investments in affordable housing, infrastructure, and sustainable urban development. The strategic initiatives outlined in the budget promise to drive growth, create jobs, and enhance the overall real estate landscape, fostering a resilient and inclusive market for the future.

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Union Budget 2024-25

Jul 24, 2024 by Mansi 0 Comments #Chief Minister of Meghalaya, #Shri Conrad Sangma, #Union Budget 2024-25

The Hon’ble Chief Minister of Meghalaya, Shri Conrad Sangma noted, “Thank Hon’ble Finance Minister, Smt Nirmala Sitaraman, for presenting a growth-oriented budget with special focus on employment creation and skill development pivoted around the four “castes” – Garib (poor), Mahilayen (Women), Yuva (Youth) and Annadata (Farmer). Increase in the outlay of Special Assistance to States for Capital Investments which provides 50 years interest free loans from Rs 1.3 Lakh Cr to Rs 1.5 lakh Cr in this budget is a positive development for Meghalaya and will accelerate the infrastructure development in our State. Incentives announced for first time employees (One month salary up to Rs 15,000 in 3 installments under DBT mode) based on EPFO registration can be dovetailed with the Meghalaya Industrial & Investment Promotion Policy, to ensure industrial development & accelerated job creation. Pradhan Mantri Janjatiya Unnat Gram Abhiyan scheme will be leveraged to saturate all the schemes in our State. All the villages in our State will be eligible for coverage under this program. Increased focus on agriculture, especially Natural Farming will help the State as we are one of the first States to adopt Natural Farming in the North-East. The increased allocations will provide better seeds & planting material to our farmers and help in increasing their income.”

  1. The State Government of Meghalaya would like to thank Hon’ble Finance Minister, Smt Nirmala Sitharaman for presenting a growth-oriented budget with special focus on employment creation and skill development pivoted around the four “castes” – Garib (poor), Mahilayen (Women), Yuva (Youth) and Annadata (Farmer).
  2. The nine priority areas of the budget – 1. Productivity and resilience in agriculture, 2. Employment and Skilling, 3. Inclusive human resources development and social justice, 4. Manufacturing Services, 5. Urban Development, 6. Energy Security , 7. Infrastructure, 8. Innovation, Research & Development and 9. Next Generation reforms, are aligned to the Meghalaya’s Mission 10 and will provide the much required impetus to the growth of the State.
  3. Increase in the outlay of Special Assistance to States for Capital Investments which provides 50 years interest free loans from Rs 1.3 Lakh crore to Rs 1.5 lakh crore in this budget is a positive development for Meghalaya and will accelerate the infrastructure development in our State. In 2023-24, we have utilized more than Rs 1300 crore under this scheme.
  4. The incentives announced for first time employees (One month salary up to Rs 15,000 in 3 installments under DBT mode) based on EPFO registration can be dovetailed with the Meghalaya Industrial and Investment Promotion Policy, 2024 to ensure industrial development and accelerated job creation in our State. Further, extension of credit guarantee scheme to provide guarantee up to Rs 100 crore for MSMEs will complement MIIPP, 2024 and provides the much required capital to our young and aspiring entrepreneurs.
  5. As the budget announce Industrial Parks in 100 cities, Meghalaya will leverage this opportunity to create world class industrial parks in our State.
  6. Pradhan Mantri Janjatiya Unnat Gram Abhiyan scheme will be leveraged to saturate all the schemes in our State. All the villages in our State will be eligible for coverage under this program.
  7. Setting up of 100 branches in the North Eastern Region by Indian Posts and Payments Bank will improve the banking coverage in our State. The State will leave no stone unturned to ensure that Meghalaya gets a good number of these new branches.
  8. The one year internship scheme announced in the budget will help our job seekers to gain valuable experience from top companies. Interns will get monthly allowance of Rs. 5,000 per month for a year and a one time allowance of Rs. 6,000.
  9. Generous allocations to housing schemes – PMAY – Grameen and Urban will be leveraged to saturate housing coverage in our State.
  10. Increased focus on agriculture, especially Natural Farming will help the State of Meghalaya as we are one of the first States to adopt Natural Farming in the North-East. The increased allocations will provide better seeds and planting material to our farmers and help in increasing their income.
business

Unlocking Growth – Real Estate’s Wish-list for Union Budget 2024-25

Jun 20, 2024 by Gayathri Pariti 0 Comments #ANAROCK Group, #ANAROCK Research, #Anuj Puri, #PMAY, #Real Estate's Wish-list for Union Budget 2024-25, #Union Budget 2024-25

Anuj Puri, Chairman – ANAROCK Group

 

Anuj puri

With Union Budget 2024-25 set to be tabled in July, the real estate sector pins renewed hope on the Modi 3.0 regime. Expectations are high for tax reliefs and other sentiment boosters. The future of the overall industry also depends on unfettered infrastructure deployment to support and improve urban living standards as well as to develop and promote newer areas.

Will the government finally decide to give in to the long-standing demand for industry status for the entire housing sector? Will it take ‘real’ measures to revive the affordable housing segment, which has been on a steady decline after the pandemic?

The Indian housing sector remained upbeat in 2024 till date, with housing sales and new launches creating new peaks in the top 7 cities. Sales reached an all-time high at about 4.93 lakh units in FY23-24, while 4.47 lakh units were launched.

However, this momentum must continue in the future too – and the current growth trajectory is skewed towards mid-range and premium housing. Considering the specific housing needs of India’s lower-income groups, this momentum cannot ride solely on higher-priced homes while affordable housing continues to languish.

As per ANAROCK Research, the sales share of affordable housing reduced significantly after COVID-19 – from over 26% in 2022 and over 38% in 2019 to approx. 20% in Q1 2024. Due to low demand, this segment’s share of the overall housing supply in the top 7 cities also fell to 18% in Q1 2024, from nearly 40% in 2019.

Many interest stimulants previously extended to buyers and developers of affordable housing have expired in the last two years. This important segment must be revived with high-impact measures like tax breaks – for developers, so that they will focus more on affordable housing, and for buyers to improve affordability.

Other measures to reignite affordable housing would be:

Credit-linked subsidy scheme under PMAY

This scheme for EWS/LIG, which expired in 2022, should be revived to incentivise first-time buyers of affordable homes across cities. This will onece again invigorate demand in this segment. Subject to criteria specified under government guidelines, CLSS was previously available for housing loans to EWS/LIG buyers in new constructions, and for the addition of rooms, kitchen, toilet etc. to existing dwellings. Also, under PMAY (Rural), one could avail of this subsidy for all ‘kaccha’ homes being converted into ‘pucca’ ones, provided they fulfil the eligibility criteria.

Re-introduce 100% Tax Holiday for affordable housing developers

To boost supply and incentivise developers to build more affordable housing, the government can re-introduce the ‘100% Tax Holiday’ benefit they previously enjoyed under section 80-IBA in the Finance Act, 2016. This section provided for major tax relief on the profits earned from developing and building affordable housing projects.

Tweak definition of affordable housing criteria to widen additional deductions benefits to more buyers

According to the Ministry of Housing and Urban Poverty Alleviation, affordable housing is defined based on property size, price, and buyers’ income. For instance, affordable housing is a house or flat with carpet area up to 90 sq. m. in non-metropolitan cities and towns, and 60 sq. m. in major cities and valued for both. The central bank’s definition, on the other hand, is based on the loans given by banks to people for building a house or buying apartments.

The government must seriously reconsider revising the pricing of homes within the affordable housing budget, taking into consideration city-specific market dynamics. As per the current definition, the size of units at 60 sq. m. carpet area is appropriate. However, prices of units  are not viable across most cities.