Real Estate Sector About Budget 2024- Take a look at the major pronouncements that the minister of finance made that affect the real estate market. Today marked the eighth time that Union Budget was presented by Finance Minister Nirmala Sitharaman. “Turning attention to the full year and beyond, in this Budget, we particularly focus on employment, skilling, MSMEs & the middle class,” stated Sitharaman, focusing on the subject of the budget.
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Budget 2024: Major announcements and responses from the industry
Pradhan Mantri Awas Yojana
The finance minister announced that three crores more residences will be built under the Pradhan Mantri Awas Yojana (PMAY), of which one crore urban poor people will be served under the PMAY Urban. In addition to the Rs 2.2 lakh crore in government aid that will be given over the next five years. The centre will invest about Rs 10 lakh crore towards this.
We applaud the emphasis on growth hubs and urban development. The PM Awas Yojana’s provision of Rs 10 lakh crore, which includes interest subsidies, will significantly lower housing costs for the urban poor & middle class.
Reducing the long-term capital gains tax rate
FM declared in her Budget speech that the long-term capital gains (LTCG) on real estate would drop from 20% to 12.5%. However, also announce the elimination of the indexation benefits associated with real estate sales.
Because real estate investments can profit from indexation, they have long been seen as a desirable class of investments. Although the long-term capital gains tax rate on the sale of real estate assets has been lowered in the budget that was unveiled today. Sellers may suffer from the elimination of indexation benefits. While the main goal of simplifying taxes must be acknowledged, individual sellers or middle-class sellers. Who had invested in real estate with the hope of later profiting from an increase in market value may be especially harmed by this move. It remains to be seen whether this would have an overall negative influence on the market for residential real estate projects.
Stamp duty rationalization
Stamp duty is a substantial expense that must be covered when purchasing real estate. In order for the state government to register your property in its records, you must pay this one-time fee. There has always been a need to moderate the stamp duty costs because this significantly raises the cost of real estate. “We will encourage states which continue to charge high stamp duty to moderate the rates for all. And also consider further lowering duties for properties purchased by women,” Sitharaman stated in her Budget 2024 speech. This change will become a crucial part of plans for urban development. Pushing governments to lower high stamp duties is a great first step towards inclusive growth, particularly for women.
The budget has made a major contribution to solving the housing crisis in our country. One notable measure to increase property ownership is to encourage states to lower stamp duty. Furthermore, it is a positive development that stamp duty for female homeowners has been further reduced.
Rental properties
“Moreover, enabling policies and regulations for efficient & transparent rental housing markets with enhanced availability will also be put in place,” Sitharaman stated in her speech announcing the budget. These will be PPP-developed rental apartments designed in the style of dorms for industrial workers.
“A strong vision for urban development is highlighted by the PPP model’s concentration on rental housing through dorms in industrial parks and the approval of 12 additional industrial parks. We expect substantial increases in the supply of reasonably priced rental accommodation for industrial labourers with continued infrastructure stimulus. As evidenced by the allocation of Rs 11.11 lakh crore for capital expenditures.
Transit-oriented development
The government is working on transit-oriented development for 14 major cities having a population of more than 30 lakh in an effort to assist cities in becoming growth hubs. The strategy for finance and implementation is being developed.
India is becoming a major hub for offices around the world; its real estate industry is worth $300 billion and employs 7 crore people. This industry propels FDI, infrastructure growth, and economic activity. Strengthening India’s position as a GCC hub and generating millions of jobs. The government’s emphasis on human capital development and innovative urban regeneration. Including initiatives to train and hire young people, strengthens India’s standing as a cutting-edge, long-lasting commercial hub.
We applaud the focus on sustainable development, which will result in more livable. Sustainable urban areas that improve people’ quality of life. This includes transit-oriented development, city planning, and the use of solar and renewable energy.
Land mapping
Speaking specifically on land mapping, Sitharaman stated that urban lands will be digitalized by GIS mapping. While all rural lands will be identified by Unique Land Parcel Identification Numbers (ULPINs), also known as Bhu-Aadhaar.
The real estate industry will benefit greatly from initiatives like workforce skill development and the digitalization of land records & GIS mapping.
What was missing in Budget 2024?
For a considerable amount of time, the Indian real estate sector has been requesting industry classification and a single window policy; this was not addressed in the Budget 2024. Experts feel that having an industry status comes with several benefits. That will boost the functioning of the sector and increase its economic contribution. A single-window strategy will streamline the bureaucracy and facilitate authorization grants, leading to quicker project delivery and construction.
It’s interesting to note that the state government of Tamil Nadu has developed a single window clearance system. Where individuals can obtain authorization to develop small residential buildings by self-certification. Despite the fact that the central government has yet to address this issue. The section was seeking solutions for significant concerns connected to its interests, such as income tax exemptions and land liquidity. The real estate industry was expecting steps to lower the cost of materials and to focus more on the sector’s growth.
Conclusion
Although real estate was mentioned in passing in the Budget 2024. It fell largely short of the aspirations and expectations of both the business and homebuyers. The majority of the segment’s requirements and wants were not even mentioned. Industry opinions, however, are clouded by the fact that this Budget has set the path for future developments that would significantly benefit the sector.
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