By FnF Correspondent | PUBLISHED: 02, Jan 2024, 16:16 pm IST | UPDATED: 02, Jan 2024, 16:16 pm IST
New Delhi: The real estate industry has sought industry status for the housing sector and single-window clearance for housing projects from Finance Ministry as the latter prepares to present the Interim Budget 2024 in February.
"We must have reasonable expectations for the interim budget, which will be unveiled before the general elections," said Anuj Puri, Chairman – ANAROCK Group.
Maximum deduction for home loans (u/s 24)
It is necessary to increase the Section 24 of the Income Tax Act's INR 2 lakh tax rebate on home loan interest rates to at least Rs 5 lakh. Doing so could stimulate a more robust market for housing, particularly in the budget homes segment, which has seen a decline in demand since the pandemic.
Decisive boost for affordable housing
Given how badly the epidemic affected this segment's target audience, affordable housing has been affected severely. ANAROCK Research finds that the previously much-touted budget homes category saw a decline in overall sales - to approximately 20% in 2023 from over 30% in 2022, and nearly 40% in the period before to the pandemic.
Modify the qualifying standards for affordable housing
The government needs to take a hard look at adjusting the qualifying cost of properties within cities’ affordable housing segment. Although the units' defined size of 60 square metres is reasonable, the prices of up to Rs 45 lakh make them unaffordable to a huge share of the target clientele. For example, a budget of <INR 45 lakh is irrelevant for a metropolis like Mumbai; it should be increased to at least INR 85 lakh. The budget should be raised to at least INR 60–65 lakh for other large cities. With this price adjustment, more homes will be within the reach of more buyers, who will be able to take advantage of other advantages such government subsidies, reduced GST rates at 1% without ITC, etc.
Release government land for affordable housing
Addressing the land shortage for this vital housing segment is also necessary. Certain lands that are owned by Indian Railways, Port Trusts, Department of Heavy Industries, etc., may be released by the corresponding government agencies. When this land is released at low cost specifically for affordable housing, it will also significantly lower real estate prices overall.