The upcoming Budget 2025, to be presented by Finance Minister Nirmala Sitharaman on February 1, holds great anticipation for all economic sectors, especially the real estate market. As the largest democracy makes crucial financial decisions, this budget could provide significant advantages for middle-class home buyers. Real estate experts suggest that vital reforms in financing, taxation, and infrastructure policy could enhance growth prospects. Ultimately, the aim is to promote development and offer tangible benefits to home buyers.
Key Expectations from Budget 2025 for Real Estate
Real estate stakeholders are hopeful that the budget will prioritize infrastructure development including metro rail, rail networks, and multi-modal corridors. Enhancements in these areas are essential for promoting commercial real estate in urban and rural regions. Moreover, reducing GST on raw materials like cement and steel can lower construction costs, enabling developers to complete projects at competitive prices, which could in turn benefit middle-class buyers by lowering home prices.
Eight Significant Measures to Benefit Middle-Class Home Buyers
- Increase in Housing Units: There is a pressing need to enhance the number of houses in the market. The budget should allocate more funds for affordable housing schemes and promote credit-linked subsidies. This could catalyze the success of the Pradhan Mantri Awas Yojana (PMAY-U), accelerating the mission of providing homes for all.
- Simplification of GST System: The current GST framework is complicated, causing challenges for developers. A simplified GST rate structure with uniform rates for both residential and commercial projects could reduce costs and make homes more affordable for buyers.
- Standardizing Stamp Duty Rates: Excessive stamp duty rates in certain states create a financial burden for home buyers. Establishing uniform stamp duty rates for properties valued up to ₹1.5 crore could alleviate this issue. With the rising demand for rental housing in urban areas, the government should also develop policies promoting affordable rental housing schemes, ensuring quality living for millennials and working professionals.
- Granting Industry Status to Real Estate: Awarding industry status to real estate could enable developers to access loans at lower interest rates and facilitate timely project completion. Consequently, this could provide significant advantages for middle-class buyers involved in affordable housing projects. Implementing tax reforms, such as increasing deduction limits under Section 80C and 24(b) of the Income Tax Act, could make home purchasing easier.
- Encouraging NRI Investments: Improved regulations and lower taxes can promote investment in Indian real estate from Non-Resident Indians (NRIs). A single-window clearance system could streamline the project approval process, effectively reducing costs for developers.
Conclusion
As we approach Budget 2025, the expectations from the real estate sector are high. By implementing strategic measures outlined above, the government can foster a robust housing market that meets the needs of the middle-class segment, ultimately paving the way for a prosperous future for home buyers across India.