The year 2021 in many ways was the year of hope and revival whereas 2022 will be the year to sustain the growth momentum. The real estate sector, like others businesses, is looking forward to many positive, innovative and path-breaking announcements in the budget this year.
Expectations from the Union Budget 2022-23:
- Deviation of 20% from circle rates should be extended across the sector and not limited to homes costing upto Rs.2 crores. The same will allow developers to offload the massive build-up of unsold inventory costing more than Rs.2 crores. Currently the major part of the unsold inventory is ready-to-move-in and falls in the luxury category.
- There couldn’t be a more opportune year to accord industry status to the Real Estate sector as a whole; currently the same has been accorded only to affordable housing. This is a long-pending demand and can help developers raise funds at lower costs.
- The government needs to push the well-capitalized NBFCs and banks to extend credit and liquidity to the players in the sector who have good equity left in their stuck projects.
- The government after the decent success of its SWAMIH fund, should announce several more funds that can help target specific real estate verticals that need liquidity support and high capital infusion like township developments and large format business parks.
- Extending no tax upto an income of Rs.10 lacs to all taxpayers for a year to give impetus to demand and consumption.
- The reduced repo rate has helped reduce EMI’s for homebuyers; the government should permit further deductions in the income tax for individuals availing homes to buy affordable and mid-income homes.
- The government should declare tax free, the rent income received from any one owned house across the country. The same will see the young, new age investor pour money in Real Estate.
- The real estate sector contributes the second most to employment in the country and is expected to contribute to the tune of 11% to the nation’s GDP. Keeping the same in mind specific threshold lead incentive for developers should be announced to encourage job creation in the category.