Even before the pandemic took over the state of the world, the Indian real estate sector was riding a roller coaster ride with many great downs and small ups. But looking at the present state of the sector which is showing great signs of recovery due to macro-economic, government interference, the developers, buyers, and sellers are looking forward to Union Budget 2022.
The real estate market sector’s state can’t be ignored, as it is one of the top contributors of GDP of India with 6% of the contribution. On top of that, sectors like steel and cement, which are indirectly connected with a real estate feel the impact of the latter’s downfall. Also, the real estate sector is a source of employment for both skilled and unskilled workers. Hence, it becomes crucial for the government to work as a catalyst to improve real estate’s present state.
Income tax relief for home buyers
What is expected from the government? In order to revive the demand, the government can provide some relief to the home buyers by raising the tax slab on the home loan interest to Rs 5 lakh from Rs 2 lakh. This expected revised tax slab will also act as a financial cushion to the middle class who are looking forward to purchase a home in 2022. The demand-pull needs to be curated in such a way that it promotes healthy sustainable real estate growth, which will only help the country get back to its previous glories. Also read – Importance of RERA in Real Estate Industry: 2022
Impact of the Pandemic on People’s Lives
WFH culture became a new normal, which is still active in many cities and offices. This has increased the demands for moving into bigger spaces from 1BHK to 2BHK or, from 2BHK to 3BHK. To make this shift easy, the government needs to allow it in the CLSS scheme of Pradhan Mantri Awas Yojana (PMAY). Also, read – Important Things to Remember Before Buying a Flat.
GST reforms
No act is in a perfect state. That’s why our constitution has a provision to make desirable changes based on people’s needs and time. The real estate sector is also expecting changes in the GST as well, such as adjustments in the input tax credit. This will lower the construction cost, resulting in lower property prices. Lower prices will boost the demand and help the industry to get back on track.
Lowering the GST on raw materials like cement, iron, bricks, steel, etc, would boost the sector’s demand, eventually helping the GDP to grow and improve gradually. The developers are hoping that the raw materials used in the construction should be included in the list of essential items, as the home is the basic and fundamental need of the people. The GST on raw materials should be fixed at 12%.
Also read – The Year 2022: Profitable Time to Invest in the Indian Real Estate.