Budget Outlook from the Pune Real estate Industry
Anil Pharande, President, CREDAI Pune Metro
Our recommendations are focused on sustaining the current growth in the sector, boosting demand and exemptions for home buyers. The real estate sector can add millions of livelihoods in a short time and significantly contribute to the GDP.
Ranjit Naiknavare, Vice President, CREDAI-Pune Metro
As the real estate sector has been on a growth path in the last 2 years across all parts and various categories, we at CREDAI-Pune Metro have several recommendations for Union Budget 2023-24. Some of the key recommendations include an increase in tax exemption on interest paid on home loans, exemption on rental incomes, relaxation in investments on long-term capital gains, uniformity and expansion in the definition of Affordable Housing, and exemption on investments in Real Estate through REITs. With increasing retail inflation and cost of living, there is a compelling need to increase the existing limit of Rs 2 Lakh on the exemption of interest paid on the home loan. This would not only give some extra disposable income in the hands of middle-income homeowners but would also attract prospective homebuyers to buy a home and thereby boost demand.
The price cap of INR 45 Lakh on units to qualify as affordable housing needs to be revised as there have been substantial changes in the prices of various construction raw materials, labor costs, and overall construction costs. This has impacted the overall price of housing leading to ineligibility for tax exemptions under Section 80IBA. We urge the officials to expand the definition of Affordable Housing units only to carpet areas without any price cap. We also request the Government to incentivize homeowners by exempting 100% of the rental income up to Rs. 20 lakhs per annum. This would encourage people with disposable incomes to invest in properties for renting purposes. Also, there should be the flexibility of allowing investments through Long Term Capital Gains in more than one residential property and there should be a reduction in the tax rate on long-term capital gains on capital assets from 20% to 10% and a reduction of the holding period to 12 months.
Kapil Gandhi (MD, Sigma One universal)
Tax incentives on alternate real estate businesses such as ‘student housing’, and ‘Co-working/Co-living are required. Pune is the Oxford of the east, but there is a shortage of Student housing in Pune due to feasibility. An attractive tax rebate will help developers start taking up projects, which will ultimately benefit students & floating population.
Abhishek Bhatewara, Executive Director, Rohan Builders
The focus of the budget should be to help sustain the demand from homebuyers. The government should continue its infrastructure push, not only in the form of more funds but also by strictly monitoring the actual infrastructure execution. Deduction on increasing the limit of housing loan interest under Sec 24(b) to 5 Lakh for the self-occupied property should be considered and deduction under section 80C for principal repayment of housing loan should be increased from the existing limit of 1.5 Lakh and not be clubbed with other tax saving instruments. Long-term capital gains on capital assets should be taxed at 10% and the holding period should be reduced to 12 months. The budget should aim to provide incentives to boost green and sustainable development by extending and enhancing the Perform, Achieve, Trade (PAT) scheme established by National Mission for Enhanced Energy Efficiency to the Real Estate sector. The government’s objective of ensuring ‘Housing for All can be boosted’ by the price cap of INR 45 Lakh on units to qualify as affordable housing needs to be revised as there have been substantial changes in the prices of various construction raw materials, labor costs and overall construction costs and further full tax holiday under Section 80IBA for affordable housing projects should be continued. The Credit Linked Subsidy Scheme under PMAY should be reinstituted.
Vishal Gokhale, Chairman, and MD, Gokhale Constructions
Some of the key recommendations in this year’s budget are to increase tax exemption on interest paid on home loans, exemption on rental incomes, and relaxation in investments on long-term capital gains. The existing limit of Rs 2 Lakh on exemption of interest paid on home loans should be increased to attract prospective homebuyers and thereby boost demand. The Government should incentivize homeowners by exempting 100% of the rental income up to Rs. 20 lahks per annum.
Krishnakumar Goyal, Chairman & Managing Director, Kohinoor Group
The limit for affordable housing is currently Rs 45 lakh. But considering the rising inflation, this limit should be increased to Rs. 60 to 65 lakhs for big cities and 85 lakhs for a city like Mumbai. At the same time, the GST rate levied for the resident and commercial sectors should be reduced. Along with raising the standard of the construction industry, it is necessary to balance the long-term and short-term gains.
