BUDGET 2024: IMPACT ON REAL ESTATE IN INDIA
KHANTI ADVISORS
Strategic Debt Syndication | Transaction Advisory Services | Compliance
The Union Budget of India for 2024 introduces key measures impacting the real estate sector. It includes tax reforms, incentives for affordable housing, and infrastructure development aimed at stimulating growth and addressing industry challenges.
> AFFORDABLE HOUSING INITIATIVES
Benefit: The budget has allocated substantial funds towards affordable housing projects, aiming to provide housing for all by 2025. This includes tax incentives and subsidies for developers engaged in constructing affordable housing units.
Impact: Increased funding and incentives are expected to spur construction activity in the affordable housing segment, thereby reducing housing shortages and improving accessibility for low-income groups.
Real Fact: The budget proposes a total of ₹10 lakh crore for the Pradhan Mantri Awas Yojana - Urban (PMAY-U), which aims to build affordable housing units by 2024-25.
> TAXATION CHANGES
Change: Budget 2024 has reduced the long-term capital gains tax rate on real estate transactions from 20% to 12.5% for properties held for more than two years. While this reduction appears beneficial, it no longer allows indexation benefits for properties acquired after 2001.
Impact: With this benefit no longer applicable, sellers may face higher effective tax burdens on their gains from recent property acquisitions. This reduction is expected to incentivize property sales and potentially increase liquidity in the real estate market.
Real Fact: The removal of the indexation benefit for long-term capital gains in real estate is likely to significantly impact property owner.
> INFRASTRUCTURE DEVELOPMENT
Benefit: The budget emphasizes infrastructure development as a key driver of economic growth. Significant investments are planned in transportation, urban infrastructure, and smart city initiatives.
Impact: Improved infrastructure is likely to enhance connectivity and liveability in urban areas, boosting demand for real estate in well-connected locations and supporting commercial property developments.
Real Fact: ₹1.5 lakh crore has been allocated for the development of urban infrastructure under the Smart Cities Mission, which includes projects aimed at enhancing public transport and urban amenities.
> GREEN INITIATIVES AND SUSTAINABLE DEVELOPMENT
Change: The budget introduces incentives and regulations aimed at promoting green buildings and sustainable development practices in the real estate sector. This includes tax incentives for developers adopting green building norms.
Impact: Increased adoption of green building practices is expected to reduce environmental impact, lower operational costs for property owners, and align with global sustainability goals.
Real Fact: The budget proposes tax incentives and grants for green buildings, encouraging developers to incorporate energy-efficient designs and renewable energy solutions.
At KHANTI ADVISORS , we are committed to keeping our clients informed about Budget 2024 developments. By seizing opportunities presented by the budget, stakeholders can achieve sustainable growth and success in India’s evolving real estate landscape.
Stay tuned and follow KHANTI ADVISORS and visit our website www.khantiadvisors.com. For personalized advice and expert analysis, contact Khanti Advisors today.
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