Budget 2024: Real estate players seek tax breaks, REIT reforms, sector status, expenditure hike in Union Budget 2024-25

Budget 2024: The commercial real estate sector is eagerly looking forward to reforms that will boost growth and investor confidence in the Union Budget 2024-25. Industry leaders agree on the need for a stable tax framework for Real Estate Investment Trusts (REITs), which they see as essential to boost the sector, stimulate economic growth and create jobs.

Ramesh Nair, CEO, Mindspace Business Parks REIT, stressed on the importance of reducing the minimum holding period for REIT units from 36 months to 12 months and classifying REITs as equity instruments to enhance liquidity. He also stressed on the need to allow Input Tax Credit under the GST Act for construction tenders, seeing it as a crucial step to reduce costs and attract more investments. “It is crucial to maintain investor confidence in REITs with a stable tax framework as REITs play a vital role in boosting real estate, driving economic growth and creating jobs,” Nair said.

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Vimalendra Singh, Chief Business Officer (Residential) of Mahindra Lifespace Developers Ltd, stressed the importance of increasing mortgage interest deduction to ₹4 lakh to ease the financial burden on homebuyers. He also pointed out that strengthening the implementation of the Real Estate Regulatory Authority (RERA) to ensure transparency and accountability and introducing a single-window system for expediting project approvals are key expectations. “Increasing the mortgage interest deduction to ₹4 lakh is a major step towards easing the financial burden on homebuyers as house prices and interest rates rise,” Singh said.

Atul Bohra, Group CEO, Kolte-Patil Developers Ltd, stressed on the need to maintain the sector’s momentum with GST related input tax concessions and reduced interest rates. He called for streamlined single-window clearing systems and possible GST rate reductions, which he believes will benefit both developers and homebuyers. “Our main expectation is GST related input tax concessions and reduced interest rates. These measures are crucial to provide financial relief and improve project viability,” Bohra stressed.

Anil G Verma, Executive Director & CEO, Godrej & Boyce, stressed on the need to stimulate private consumption through measures such as optimising GST rates, revising personal income tax slabs and reassessing interest rates to provide EMI relief. “Private consumption drives private investment and I hope the GoI will take steps to stimulate consumption through a series of measures,” Verma said.

Amit Mor, CFO of Prestige Group, stressed the importance of tax incentives for developers who adopt green building practices and take environment-friendly measures. He also mentioned the need to grant industrial status to the real estate sector to reduce borrowing costs and improve access to finance. “Tax incentives for developers who adopt green building practices will attract crucial investments in green buildings and address environmental issues,” Mor said.

Sahil Verma, COO of Shray Projects, called for extending SEZ benefits to non-SEZ IT parks and providing tax breaks for companies investing in office redesign to support hybrid working models. He also advocated for increased FSI allowances in major cities to maximise land use efficiency.

Sanjeev Bhandari, Founder and CEO of AirBrick Infra, stressed the need for more infrastructure spending and tax incentives such as reduced GST rates on commercial properties. He also mentioned the importance of simplifying FDI regulations to attract more international investments. “Improved connectivity and infrastructure are crucial to make commercial properties more attractive to investors and businesses,” Bhandari noted.

Priyatham Kumar, Founder, Homes247, highlighted the demand for organised retail and office spaces even in tier 2 cities. He stressed the need for policy changes and investments to support this growth. “To support this growth, we need policy changes and investments similar to those that are being made for affordable housing,” Kumar said.

Anuj Munot, CEO & Founder, UrbanWrk, sought steps to address the high input costs of essential materials like steel and cement and demanded a reduction in the 28% GST on cement and industrial status for real estate. “Reducing the 28% GST on cement and granting industrial status to real estate can reduce construction costs and enable developers to get loans at lower interest rates,” Munot pointed out.

Harsh V Bansal, Co-Founder, Unity Group, stressed on the importance of a streamlined GST framework for the commercial real estate sector. He also called for granting the sector the status of an industry to improve access to credit and reduce financing costs. “Granting the sector the status of an industry would streamline access to credit and reduce financing costs,” Bansal said.

Uddhav Poddar, MD, Bhumika Group, highlighted the rapid expansion of the retail segment and the demand for Grade A retail spaces. He advocated for the availability of GST input credit on commercial projects and the creation of a single window clearing system. “The availability of GST input credit on commercial projects would benefit this segment immensely,” Poddar pointed out.

Harsh Gupta, CEO of Sundream Group, stressed the need for measures to reduce the cost of steel and fuel input and address the high GST on cement. “The industry is eagerly waiting for measures to reduce the cost of steel and fuel input and address the 28% GST on cement,” Gupta pointed out.

Santush Kumar Pandde, COO of Real Estate at Grauer and Weil (India) Limited, pointed out the need for policies that stimulate consumer spending and drive growth in the retail sector. “Incentives for digital transformation and sustainability efforts would benefit malls immensely,” Pandde noted.