- Date : 18/01/2023
- Read: 3 mins
Are you in the market for a new home? The 2023 budget is right around the corner and it's important to know what homebuyers expect. This article delves into the top 5 most essential expectations homebuyers have from the budget. Don't miss out on this informative read!
The Indian real estate sector has been on the rise due to numerous reforms and initiatives the government took. The upcoming Union Budget 2023 is expected to bring in some more relief and incentives for homebuyers. This article looks at the top 5 expectations from Budget 2023 and how they can benefit homebuyers. We will discuss the potential announcements and benefits that the Budget is likely to bring for the real estate sector and how it can help potential homebuyers.
Real estate industry experts have identified the following top five ways in which Budget 2023 can assist homebuyers:
Exemptions under GST (GST relief)
According to experts, the present GST framework for under-construction and budget-friendly housing puts an extra load on developers, resulting in a rise in the cost of properties for buyers. A consequence of GST on cement and steel being 28% and 18%, respectively, leads to an increase in the prices of the house for developers as they cannot reimburse the tax they have paid on their input items. To ease this burden and enhance the affordability of properties, the government may consider reintroducing the Input Tax Credit in the upcoming budget.
Additionally, limiting GST to 1% for projects being constructed and lowering raw material expenses, including cement and steel, can aid in encouraging more individuals to purchase budget-friendly homes.
Tax Incentives in the Face of Increasing Rates
According to experts, rising interest rates are anticipated to have a significant influence on the home loan and real estate sectors. As rates continue to rise, affordability will become a significant concern for buyers. In order to address this, the government should consider implementing measures such as raising the tax rebate on housing loan interest under Section 24 (b) to Rs 5 lakh.
Tax rebates for first-time home buyers, such as deductions and breaks, can reduce the cost of purchasing a house and make it more manageable for those entering the housing market for the first time, as Sharma has indicated.
Rental Housing
According to Anil Pharande, President of CREDAI Pune-Metro, the housing market for rental purposes is still in the nascent stage of development. Budget 2023 could take steps to promote the growth of this sector by including measures such as offering tax benefits for developers who construct residential projects for rental purposes.
Modification to the Limit for Affordable Housing
Atul Monga, Founder and CEO of BASIC Home Loan, believes that the current price band of Rs 45 lakh for a property to be considered under affordable housing is inadequate in many cities in India and should be raised to Rs 75 lakh or higher.
Changes to Home Loan Regulations
According to Anuj Sharma, COO of India Mortgage Guarantee Corporation, there is a need to decrease home loan interest rates to make them more accessible for buyers. Although the Reserve Bank of India's policy rates plays a role in determining loan rates, the budget can provide homebuyers with relief by simplifying the rules for obtaining home loans.
Sharma further suggests that measures such as decreasing the necessary down payment or simplifying the criteria for obtaining home loans could make it simpler for home buyers to acquire financing.
In conclusion, Budget 2023 presents an opportunity for the government to address the challenges faced by homebuyers and boost the housing market. The expectations outlined in this article - if implemented, can go a long way in addressing the issues faced by homebuyers and meet the expectations of the real estate sector. The government's focus on the housing sector in Budget 2023 will be watched with keen interest by all stakeholders, including homebuyers, developers, and investors.
