Budget 2023: What home buyers can expect from FM Nirmala Sitharaman?

Among the factors most anticipated by home buyers, Budget 2023 will be an increase in the discount limit for interest payments and the principal amount of housing loans, especially to stimulate demand in a scenario of rising rates of interest. In addition, there is a request for relief on some tax procedures, the GST structure, and a cap for homebuyers.

Finance Minister Nirmala Sitharaman will announce the Union Budget 2023 on February 1

What to expect from this budget?

Ramani Sastri, Chairman and CEO of Sterling Developers, revealed that the real estate sector is waiting for much-needed reforms and incentives in the next budget. This year, demands exceeded the usual expectations for the single window clearance  and state of the industry. There is an explicit need for more tax measures for homebuyers as well as investors.

According to Atul Monga, founder and CEO of BASIC Home Loan, the real estate/mortgage sector is an important part of the Indian economy and is facing tough times due to rising interest rates. To foster growth in this sector, lenders must offer competitive credit products with reasonable rates and attractive repayment terms. This can help the segment stay competitive and provide budget certainty to customers.

Currently, the maximum tax on home loans is Rs 2 lakhs and has been the same for the past few years. During these years, there was also inflation. Therefore, Sastri said, the government should increase the discount limit for interest payments on home loans from present Rs. 2 lakhs per annum to Rs. 5 lakhs, which will boost demand for homes, especially in the affordable segment.

Sterling Developers MDD believes that there is a definite need for second home income tax relief and positive measures regarding long-term capital gains, which will greatly benefit homebuyers and also stimulate the industry. of real estate.

"We think the cap on capital gains for reinvestment in two properties should be lifted, and the capital gains tax rate should be lowered from 20 percent," he continued. Previously, there were unlimited tax savings on the second, therefore, that was very beneficial." And people trusted real estate as an investment opportunity. There should also be an expansion of the definition of affordable housing, as this would broaden the benefits for homebuyers and therefore boost end-user demand."

In addition, any tax breaks on rental income will also encourage more investment in residential real estate. "We also hope to reduce the capitalization tax rate by 30 percent to improve per capita purchasing power," Sastri said. "The budget should include some personal tax relief, either in the form of reduced tax rates or, more urgently, revised tax brackets. There is a disagreement. Strong interest in supporting first-time homebuyers since doing so will increase real estate sales, which not only stimulate demand for 200 other businesses but are also the country's second-largest employer.

Highlighting that interest rate increases could have a significant impact on the mortgage lending and real estate sectors, making affordability a major concern for buyers, Monga added: “The government needs to take action, such as increase tax deduction for home loan interest under Section 24(b) to INR 5 lakh. The current price range of INR 45 lakhs for a property to be considered affordable housing is not suitable in most cities in India, and should be increased to INR 75 lakhs or higher.”

In addition, Anuj Sharma, Chief Operating Officer at IMGC, also believes that tax credits or rebates for first-time homebuyers can help lower the overall cost of buying a home, making it more affordable for them. Increased housing plan provisions may also support the increased availability of affordable housing options. Infrastructure development initiatives include improvements to infrastructure, such as roads, public transportation, and utilities, that can make certain areas more attractive to homebuyers and increase property values in those areas. In addition, to increase the supply of housing, the government may announce measures to make it easier for developers to build new housing projects or measures to encourage the construction of affordable housing.