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Union Budget 2024 | Industry status and GST are top concerns for real estate developers in Noida

Union Budget 2024 | Industry status and GST are top concerns for real estate developers in Noida

Noida: Real estate developers in Noida and Greater Noida in western Uttar Pradesh expect the Modi 3.0 government’s first budget to give their sector the status of ‘industry’, giving them easier access to funds. They also want to address issues related to GST, including the 28 per cent tax on cement.

Hoping for a “nuanced approach” to the real estate woes, developers are calling on the government to provide support beyond financial incentives. The upcoming budget will focus on improving transparency and efficiency through a robust regulatory framework and streamlined approval process.

According to Dinesh Gupta, secretary of the Western Utah trade association CREDAI, stimulating the real estate sector with tax incentives, improved tax structures and a one-stop-shop policy will encourage further investment from both domestic and foreign sources.

“Moreover, tax reforms that reduce income tax for both corporates and individuals, simplify tax laws, provide targeted incentives, expand the SWAMIH stress fund and reduce GST rates on construction materials will give a boost to the construction sector and improve the situation for real estate players,” he said.

“The combined effect of these reforms will increase the amount of money available to taxpayers, enabling them to buy real estate more enthusiastically and ultimately accelerate the country’s economic growth,” Gupta said.

Ashish Bhutani, CEO of Bhutani Group, said the country’s real estate sector’s contribution to GDP is much lower compared to Europe or China. He hopes it can reach 30 percent by 2047.

“I felt that there should be 100 percent GST exemption for low and middle income housing and that the GST refund should be such that developers at least get a tax benefit that they can pass on to buyers,” he said.

Avneesh Sood, managing director of Eros Group, said while the status of the real estate sector and renewed incentives for affordable housing remain important expectations, a nuanced approach is crucial.

“In addition to fiscal stimulus, the Budget should focus on improving transparency and efficiency through a robust regulatory framework and streamlined approval process. The introduction of innovative financing mechanisms, such as green bonds tailored to sustainable urban development, could align economic growth with environmental stewardship,” Sood said.

Amit Modi, Managing Director, County Group, said, “One of the most long-standing demands that the industry has been stressing is the need to grant industry status to facilitate access to low-cost financing, which will directly benefit consumers. Moreover, implementing single-window clearance is crucial for timely completion of projects and cost efficiency.” “Moreover, reintroducing GST input credits for residential real estate will stabilise costs. We also expect to increase the mortgage interest waiver to Rs 8 lakhs per annum to support first-time buyers, while Section 80C should either cover only home loan deduction or increase the limit to Rs 5 lakh,” he added.

RG Group Director Himanshu Garg noted that to improve housing accessibility, tax rates need to be increased and the limit for affordable housing revised.

“Industry experts are in favour of increasing the affordability limit for housing in metropolitan areas, including NCR, from Rs 45 lakh to Rs 75 lakh. As a basic need of the individual and safe investment, mortgage rates should be low and the limit of Credit Linked Subsidy Scheme (CLSS) can also be increased,” he suggested.

“Furthermore, simplifying GST is essential to reduce costs and improve affordability for home buyers. Moreover, easing FDI regulations will attract international capital, which will promote growth and innovation in the luxury market,” he added.

According to Yash Miglani, Managing Director of Migsun Group, GST on cement, a major consumable, stands at 28 percent, accounting for almost a third of the total cement cost, which is a major concern.

“Addressing these and other issues (GST, sector status, single window processing) are long overdue demands that would give the sector a much-needed boost,” Miglani said.

According to SK Narvar, chairman of Trident Realty Group, investors, developers and homeowners are all optimistic and hope for a budget that promotes “simple procedures, transparency in transactions and encouragement of sustainable practices.”

Gulshan Group Director Deepak Kapoor said, “Reducing input costs for steel, cement and fuel is crucial. The GST on cement, currently 28 per cent, needs to be reduced. Besides, there is a need to promote affordable housing and introduce tax breaks to help achieve the country’s housing goals.” Finance Minister Nirmnala Sitharaman will present the budget for 2024-25 – the first during Prime Minister Narendra Modi’s third term – in Parliament on July 23.

Published July 21, 2024, 12:34 IST