Capital gains exemption limit and a steep reduction in the highest surcharge will empower the masses with enhanced liquidity flow that can be invested in real estate, points out Dhaval Ajmera.
Budget 2023 has unearthed the immense potential for the Indian real estate sector that will surface in the coming years.
The microscopic focus on the infrastructure landscape and economic strengthening is a well-revered move that will open doors to ample opportunities.
With the aftermath of the pandemic and its impact on the real estate industry being in the rearview now, this Budget has infused a plethora of benefits.
Listed below are the key developments that will prove beneficial for homebuyers in the immediate and long-term.
Rs 10 lakh crore infra outlay
The capital investment outlay of 10 lakh crores towards infrastructure is a major push to urban planning and connectivity enhancement to and from regional pockets of the country.
The announcement of 50 new airports, aerodromes and helipads will create space for real estate development in the surrounding areas and also indicates a coveted rise in property rates around these structures.
This move will also lead to job creation and strengthen the country's economy in the long run.
The multiplier effect of these measures will create new realty hotspots and extended peripheries that will ultimately benefit homebuyers and early settlers with lucrative rentals and returns.
The 79,000 crore boost to PMAY
A country that is growing at light speed with the majority of the residents being young professionals needs more housing space to accommodate them.
The highlight of the Budget, 66% for the Pradhan Mantri Awas Yojana is the highest percentage-led incremental hike in budgetary outlay.
This will act as the biggest propeller for affordable housing and the realisation of the objective of the 'Housing for All' Scheme well within the renewed deadline.
This rise in demand for affordable housing will motivate the real-estate sector to focus more on this segment whereas the subsidies will fulfil the masses' dream of owning a home.
Benefits of the new tax regime for the middle-class
The new tax regime set as default mode may act as a catalyst towards real estate as an asset-class investment opportunity.
The redefined slabs have given homebuyers the brilliant opportunity by broadening the tax exemption to a 7 lakh per annum bracket.
This capital gains exemption limit and a steep reduction in the highest surcharge are together perceived as a consumption stimulus.
This move will empower the masses with enhanced liquidity flow for discretionary spending that can be invested in real estate.
Capping the tax deduction under Sec54 and 54F
The capping of tax deductions under Section 54 and 54F to Rs 10 crores will now meet its actual goal of empowering the masses, not affecting the affordable and mid-luxury segment, as considered within the cap limit.
This may have a mild effect on the luxury segment, because of the cap limit.
However, the same shall be offset with the surcharge reduction from 37% to 25% to high-paying taxpayers with income above 5 crores, hence releasing more disposable income in their hands for investment.
Incentivising Municipal bonds to boost civic facilities
The move to incentivize civic bodies to improvise their finances and creditworthiness will encourage municipal bodies to act swiftly on public concerns, especially in the far-flung peripheries of prime cities.
This will benefit homebuyers with improvised civic facilities and boost the overall credibility of the city, thus creating more demand for housing.
Overall, this Budget is an all-inclusive approach that provides homebuyers with ample of relief and benefits from multiple dimensions.
The outcome of this will be witnessed in the days to come with the real advantages being enjoyed by ultimate homebuyers.
Furthermore, we will also see a rise in international institutional investors eyeing the real-estate sector given many of the ease of doing business norms now decriminalised.
Given these developments, homebuyers are in for a real treat with the well-crafted Budget.
Dhaval Ajmera is Director, Ajmera Realty & Infra India Ltd.
Feature Presentation: Ashish Narsale/Rediff.com