The Union Budget 2024 brought several implications for the real estate sector. Here are the key highlights:
Positive Impacts
- Boost to Affordable Housing: A significant allocation of Rs. 10 lakh crore under PMAY-Urban 2.0 aims to address the housing needs of 1 crore poor and middle-class families.
- Infrastructure Development: The substantial allocation of Rs. 11.11 lakh crore for infrastructure development is expected to drive demand for commercial and residential real estate.
- Digitization of Land Records: The introduction of a Unique Land Parcel Identification Number (Bhu-Aadhaar) and digitization of land records using GIS mapping will improve transparency and ease property transactions.
- Potential Reduction in Stamp Duty: The government’s encouragement to state governments to reduce stamp duty rates can make home buying more affordable.
Negative Impacts
- Removal of Indexation Benefit: The removal of the indexation benefit for property sales will increase the tax burden on long-term property owners.
- Changes in Capital Gains Tax: The revised capital gains tax framework for REITs and rationalization of capital gains on transfer of immovable property could impact investment decisions.
Overall Impact
While the budget offers promising opportunities for the real estate sector, particularly in affordable housing and infrastructure, the changes in taxation might pose challenges. The overall impact will depend on how the real estate industry adapts to these changes and leverages the opportunities presented.
