Budget 2023: Real estate assumptions from FM Nirmala Sitharaman
After the COVID pandemic, the residential sector is seeing a significant recovery. With sales recovering in several of the country's main areas, 2022 was one of the most exciting years for Indian real estate. Strong economic growth and an increase in demand were the driving forces behind the uptick in residential sales and business leasing. The industry anticipates a strong recovery in housing demand in 2023 and anticipates that the Union Budget of 2022 will be favorable and enabling. The industry is looking to Finance Minister Nirmala Sitharaman for a few major tax breaks and a decrease in stamp duty to help the sector.
Gurmit Singh Arora, National President of, the Indian Plumbing Association said a reduction in stamp duty is required. The burden was placed on the industry following the implementation of GST, and it is extremely difficult for builders to pass it on to consumers. It is possible to achieve this by granting waivers rather than incentivizing them.
Indian real estate stands on a strong footing with a hike of 50% in sales transactions in 2022, compared to the previous calendar year. Nakul Mathur, MD, Avanta India said the positive sentiments will continue in 2023 backed by a healthy economic outlook, expansion in the job market, and a rise in per capita income.
“Steps such as reducing GST rates on raw materials such as cement & steel, offering better credit for developers, and single window clearance can immensely help the overall sector," said Nakul Mathur.
According to Suren Goyal, Partner, RPS Group the government should step up and take proactive steps to reduce lending rates. If directly reducing the rates is not feasible then it should at least try other means such as offering incentives to first-time home buyers and rendering more lucrative deductions in income tax returns.
“Proactive steps such as increasing the limit of home loan interest deduction on income tax returns and reducing capital gain tax can give a further push to consumer spending and hence will be beneficial to the sector in the longer run. Meanwhile, GOI should also try to create new avenues of lending for the developer fraternity," said Ankit Goel, Director, of Goel Ganga Developments.
According to Hari Kishan Movva, Senior Vice President, SILA (Real Estate), the 2023 budget the industry hopes will offer some positives to help strengthen the real estate market.
Given that the inflationary environment is the key risk for real estate, we are also expecting a leeway in terms of reduction in GST rates for key raw materials and re-introduction of input tax credit which would help developers tide over inflationary pressures, he added. Mrinaal Mittal, Director, of Blackteak Realty said that the real estate industry is very sanguine about the 2023 budget and hopes to continue the strong momentum of the previous year.
As for the LTCG, the tax rate should be decreased with a relaxation on the time limit on the construction of the new property, he added.
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