The Union Budget 2024 has introduced several measures that are set to significantly impact the real estate sector in India, affecting buyers, developers, and various segments of the housing market, including luxury and affordable housing.

For Real Estate Buyers: The budget has provided relief to homebuyers through increased tax deductions on home loan interest. The ceiling for tax deduction under Section 24(b) for home loan interest has been raised, allowing homebuyers to claim a higher deduction, thus reducing the overall cost of homeownership. Additionally, the first-time homebuyer benefits under Section 80EEA have been extended, which continues to provide an extra deduction on interest paid on home loans for affordable housing.

For Developers: Real estate developers stand to benefit from several initiatives aimed at boosting the sector. The budget has proposed incentives for affordable housing projects, such as an extension of the tax holiday under Section 80-IBA, which provides a 100% deduction of profits derived from affordable housing projects. This move is expected to spur more development in this segment. Moreover, the introduction of a single-window clearance mechanism for real estate projects is expected to streamline approvals and reduce project delays, thereby lowering costs and improving efficiency for developers.

Luxury Housing: The luxury housing market also sees indirect benefits from the budget. With the increase in disposable income through various tax reforms and incentives for high-net-worth individuals, there is likely to be a positive impact on demand for luxury homes. Furthermore, the government’s continued investment in infrastructure development, including smart cities and urban transport, enhances the appeal of luxury properties located in well-connected and developed areas.

Affordable Housing: Affordable housing continues to be a focal point in the Union Budget 2024. The extension of the Credit Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY) provides subsidies on home loans, making affordable housing more accessible to the lower and middle-income groups. Additionally, increased allocation of funds towards PMAY will support the development of more affordable housing units across urban and rural areas.

Conclusion: Overall, the Union Budget 2024 takes a balanced approach to address the needs of different stakeholders in the real estate sector. By providing tax relief to homebuyers, incentives to developers, and support for both luxury and affordable housing, the budget aims to stimulate growth, improve housing affordability, and promote a more robust real estate market in India.