6 Key Factors in Budget 2024-25 That Could Impact Homebuyers

India's Budget 2024-25 introduces significant measures to boost the real estate sector, focusing on affordable housing, urban development, and tax reforms.

Ghar lists 6 major highlights for homebuyers:

1. Affordable Housing Boost

• PM Awas Yojana Urban 2.0: Allocation of Rs 10 lakh crore, including Rs 2.2 lakh crore central assistance for 1 crore economically disadvantaged and middle-class families over five years.
• Interest Subsidy: Reinstated under PMAY-U 2.0 with Rs 4,000 crore for the Credit Linked Subsidy Scheme (CLSS), benefiting EWS, LIG, and middle-income groups.
• Increased Allocation: PMAY-U allocated Rs 30,170 crore, a 20.19% increase from the previous year.

2. Urban Development Initiatives

• Infrastructure Projects: Promoting water supply, sewage treatment, and solid waste management in 100 large cities through bankable projects.
• Transit-Oriented Development: For 14 large cities with over 30 lakh population, focusing on peri-urban areas to ease urban pressure and provide economical housing options.
• Digitization of Land Records: Implementing GIS mapping for urban areas and IT-based systems for property records and tax administration to enhance transparency and efficiency.

3. Support for Private Sector Investment

• Infrastructure Investment: Encouraging private sector investment through supportive policies and new financing options to drive efficiency and innovation in infrastructure projects.

4. Stamp Duty Reforms

• Lower Stamp Duty: FM urged states to moderate high stamp duties and consider further reductions for properties bought by women, encouraging female homeownership.

5. Changes in Capital Gains Tax

• LTCG Tax Rate Reduction: From 20% to 12.5% on immovable property sales, with the elimination of indexation benefits. This change has mixed impacts, potentially increasing real tax liabilities but boosting market liquidity.

6. Increased Infrastructure Investment

The budget emphasized infrastructure investment by the private sector through funding, supportive policies, and new financing options. This aims to bring more private money into infrastructure projects, inspiring new ideas and better efficiency.

Conclusion

The Budget 2024-25 presents a promising foundation for real estate development and homebuyer support. However, addressing fundamental regulatory and economic challenges will be crucial for sustained growth in the housing sector.