Real Estate Sector Expects Maximum Home Loan Deduction in Interim Budget 2024

By Bricksnwall | 2024-01-03

Real Estate Sector Expects Maximum Home Loan Deduction in Interim Budget 2024

These are the real estate industry's estimates for the interim budget for 2024.

Delhi, New: As the Finance Ministry gets ready to publish the Interim Budget 2024 in February, the real estate sector has requested single-window approval for housing projects and industry status for the housing sector.

Anuj Puri, Chairman of the ANAROCK Group, stated, "We must have reasonable expectations for the interim budget, which will be unveiled before the general elections."

Maximum house loan deduction (u/s 24)

The INR 2 lakh tax refund on house loan interest rates under Section 24 of the Income Tax Act must be increased to at least Rs 5 lakh. By doing this, the housing market may become more active, especially in the affordable housing sector, where demand has decreased since the epidemic. 

A significant push for affordable housing

The impact of the epidemic on the target population for this sector has been particularly dire with regard to affordable housing. According to ANAROCK Research, overall sales of the once highly criticized category of affordable homes decreased to about 20% in 2023 from over 30% in 2022 and nearly 40% in the time prior to the pandemic.

The government must carefully consider changing the minimum price at which properties in the cities' affordable housing market qualify. Despite the apartments' stipulated size of 60 square meters being appropriate, a significant portion of the target customers cannot afford them due to prices as high as Rs 45 lakh. A budget of <INR 45 lakh, for instance, is insufficient for a city the size of Mumbai; it must to be raised to at least INR 85 lakh. For other major cities, the budget should be increased to at least INR 60?65 lakh. More purchasers will be able to afford more homes thanks to this price adjustment, and they will also be eligible for additional benefits such as government subsidies, lower GST rates at 1% without the ITC, etc.

It is also essential to address the land scarcity for this important housing segment. The relevant government organizations may release some land owned by Indian Railways, Port Trusts, the Department of Heavy Industries, etc. Not only will this land be released at a reduced cost for affordable housing, but it will also result in a huge decrease in total real estate costs.