The commercial real estate sector is eagerly anticipating the Union Budget 2024-25, with key players calling for a blend of tax breaks, regulatory reforms, and infrastructure investments. These measures are expected to boost investment, ease costs for homebuyers and developers, and propel the sector's growth.
Budget 2024: Real Estate Industry's Expectations and Proposals:
The commercial real estate sector is eagerly anticipating the Union Budget 2024-25, with key players calling for a blend of tax breaks, regulatory reforms, and infrastructure investments. These measures are expected to boost investment, ease costs for homebuyers and developers, and propel the sector's growth.
Key Industry Proposals:
REIT Reforms and Tax Incentives:
Ramesh Nair, CEO, Mindspace Business Parks REIT: Advocates for reducing the minimum holding period for REIT units from 36 to 12 months and classifying REITs as equity instruments to enhance liquidity. He also stresses the importance of allowing Input Tax Credit (ITC) under the GST Act for construction procurements.
Quote: "Maintaining investor confidence in REITs with a stable tax framework is crucial as REITs play a pivotal role in boosting real estate, stimulating economic growth, and creating jobs."
Home Loan Interest Deduction:
Vimalendra Singh, Chief Business Officer, Mahindra Lifespace Developers Ltd: Emphasizes increasing the home loan interest deduction to ₹4 lakh to reduce the financial burden on homebuyers and reinforcing RERA implementation for transparency.
Quote: "Increasing the home loan interest deduction to ₹4 lakh is a critical step to alleviate the financial burden on home buyers amid escalating property prices and interest rates."
GST and Single-Window Clearance:
Atul Bohra, Group CEO, Kolte-Patil Developers Ltd: Calls for GST-related input tax concessions, reduced interest rates, and streamlined single-window clearance systems.
Quote: "Our foremost expectation is for GST-related input tax concessions and reduced interest rates. These measures are crucial for providing financial relief and enhancing project feasibility."
Private Consumption and Tax Reforms:
Anil G Verma, Executive Director & CEO, Godrej & Boyce: Highlights the need for optimizing GST rates, reviewing personal income tax slabs, and reassessing interest rates to boost private consumption.
Quote: "Private consumption drives private investment, and I am hopeful that the GoI will take steps that boost consumption through a slew of measures."
Green Building and Industry Status:
Amit Mor, CFO, Prestige Group: Advocates for tax benefits for developers incorporating green building practices and granting industry status to the real estate sector to reduce borrowing costs.
Quote: "Tax benefits for developers incorporating green building practices will attract crucial investment in green buildings and address environmental concerns."
SEZ Benefits and Hybrid Work Models:
Sahil Verma, COO, Shray Projects: Suggests extending SEZ benefits to non-SEZ IT parks and providing tax incentives for office redesigns to support hybrid work models.
Quote: "Extending SEZ benefits to non-SEZ IT parks and providing tax incentives for office redesigns will support the shift towards hybrid work models."
Infrastructure Spending and FDI Regulations:
Sanjeev Bhandari, Founder and CEO, AirBrick Infra: Emphasizes the need for increased infrastructure spending and simplifying FDI regulations to attract more international investment.
Quote: "Enhanced connectivity and infrastructure are crucial for making commercial properties more attractive to investors and businesses."
Organized Retail and Office Spaces:
Priyatham Kumar, Founder, Homes247: Highlights the demand for organized retail and office spaces in Tier 2 cities and the need for supportive policy reforms and investments.
Quote: "To support this growth, we need policy reforms and investments similar to those aimed at housing affordability."
Input Costs and GST Reduction:
Anuj Munot, CEO & Founder, UrbanWrk: Calls for addressing high input costs and reducing the 28% GST on cement, as well as granting industry status to real estate.
Quote: "Reducing the 28% GST on cement and providing industry status to real estate can lower construction costs and enable developers to access loans at reduced interest rates."
Streamlined GST Framework:
Harsh V Bansal, Co-founder, Unity Group: Stresses the importance of a streamlined GST framework and granting industry status to the sector.
Quote: "Granting industry status to the sector would streamline credit access and reduce financing costs."
Retail Segment and Single-Window Clearance:
Uddhav Poddar, MD, Bhumika Group: Advocates for GST input credit availability on commercial projects and establishing a single-window clearance system.
Quote: "GST input credit availability on commercial projects would immensely benefit this segment."
Lowering Input Costs:
Harsh Gupta, CEO, Sundream Group: Highlights the need for measures to lower steel and fuel input costs and address the high GST on cement.
Quote: "The sector eagerly awaits measures to lower steel and fuel input costs and address the 28% GST on cement."
Stimulating Consumer Spending:
Santush Kumar Pandde, COO of Real Estate, Grauer and Weil (India) Limited: Points out the need for policies that stimulate consumer spending and drive growth in the retail sector.
Quote: "Incentives for digital transformation and sustainability efforts would greatly benefit shopping malls.
These industry leaders hope that the upcoming Union Budget will address these key concerns to foster a more robust and resilient real estate sector.
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