The real estate sector has always been an integral part of the Indian economy, providing employment, income, and a source of investment for millions of people. But like every other industry, it has undergone significant changes over the years, from technological advancements to economic recessions. In recent years, the real estate sector has been on the road to recovery, thanks to factors like low interest rates, the increasing popularity of rental properties, and the growth of e-commerce.
The 2023 budget has set the stage for the real estate sector to reach new heights. The budget had several key provisions aimed at boosting the growth of the industry, which has been impacted by the ongoing pandemic.
Let’s take a closer look at the provisions and their potential impact.
Affordable Housing –
One of the major highlights of the budget was the allocation of funds for the development of affordable housing. In Budget 2023, the Indian government has taken a significant step towards promoting homeownership among low-income families by allocating a substantial amount of funds for interest and credit-linked subsidies. This initiative aims to provide financial assistance to those who need it the most, making it easier for them to purchase their own homes.
Sustainable Buildings –
As the world becomes more conscious of its impact on the environment, the real estate sector is expected to see an increase in the construction of sustainable buildings. The government has allocated funds for the development of green buildings, which will help reduce carbon emissions and create a more sustainable real estate industry. This will encourage developers to adopt environmentally friendly practices, making the sector more attractive to consumers.
Simplification of Buying and Selling Property –
The government has announced measures to simplify the process of buying and selling property. This includes easing the taxing process of stamp duty procedures, introduction of e-registration of properties, and creating a central database of various real estate transactions. These measures are expected to make the process of buying and selling a property more efficient, transparent, and hassle-free.
Smart Cities –
The budget has provisions for the development of smart cities. The government has allocated funds for the development of infrastructure and amenities in these cities, making them more attractive to residents and businesses. This will provide a boost to the real estate sector, as demand for property in smart cities is expected to increase.
Infrastructure Development –
The government has promised to invest heavily in infrastructure development, which is expected to drive the demand for real estate. The increase in infrastructure spending is expected to bring about an increase in housing and commercial real estate projects, creating more opportunities for the real estate sector. This will create more job opportunities in the real estate industry, as there will be a higher demand for raw materials and construction equipment.
Capital gains –
In the Budget 2023, the government has capped the capital gains benefit in property deals at Rs 10 crore, which can help to sanitize real estate investments further. While this may impact only a small segment of top-end residential deals, it is a step towards creating a more equitable investment landscape.
Spending diligence –
Additionally, the increase in the tax rebate slab from Rs 5 lakh to Rs 7 lakh in the new tax regime could push investments in the affordable segment. This means more people may be encouraged to invest in affordable housing, which can provide better returns in the long run.
GIFT City –
Furthermore, the development of data embassies with a single-window approval and registration system in the Gujarat International Finance Tec-City (GIFT City) is likely to attract countries looking for digital continuity solutions. The single window system is touted to be a stepping-stone in making GIFT City a prominent landmark global financial hub in the country. The International Financial Services Centres Authority (IFSCA) will likely be empowered with powers to avoid dual registration, which can ultimately impact the real estate sector.
The government is continuing its commitment to infrastructure growth and affordable housing with increased fund allocation to the Pradhan Mantri Awas Yojana (PMAY). This mission to provide housing for all in India is a laudable step towards a more equitable society.
So, if you’re looking for luxury housing, the capital gains on investment in residential houses have been capped at 10 crores. This means that areas like South Mumbai will see increased demand for high-end homes.
But it’s not just about housing – the budget also includes initiatives towards infrastructure development in the form of roadways, railways, airports, and power. These investments will pave the way for economic growth and set the tone for high demand in the real estate sector.
Overall, the 2023 budget is a promising step towards a more prosperous India, and savvy investors should take note of the opportunities in the real estate market. Whether you’re looking for affordable housing or luxury properties, there’s something for everyone in this exciting time of growth and development.