Beyond Budget: Further Push to Property
Torbit Realty- August 18, 2024
While the FY25 budget provided a direct and indirect push to the real estate sector, beyond budget, the Modi government is taking several measures to give a further boost to the real estate and housing sector.? Vinod Behl
In a further push to budget provisions to construct 3 crore new houses (including 2 crores rural and 1 crore?urban houses) across the country under PMAY, the Union cabinet approved Rs 3.6 lakh crore to be spent over the next 5 years. Out of this, the central government will contribute Rs 2.06 lakh for rural housing and Rs 1.6 lakh for urban housing, states will fund Rs 1.03 lakh crore for rural housing and Rs 70000 crore for urban housing.
It has been decided that for urban housing, the corpus of the Credit Risk Guarantee Fund Trust will be tripled to Rs 3000 crore to provide guarantees to lenders against defaults on affordable housing loans. Beneficiaries taking loan up to Rs 25 lakh with house value of up to Rs 35 lakh will qualify for a 4 percent interest subsidy (subject to conditions), capped at 1.80 lakh in 5-year instalments. The central government has set a deadline of March 2029 to complete the construction of 3 crore new homes.
Further post-budget, the government is broadening the scope of affordable housing under PMAY 2.0. It is finalizing fresh guidelines and new income slabs for middle income groups (MIG). Presently, under PMAY, the annual income criteria for eligibility?under MIG-1 category is Rs 6-12 lakh and for MIG-2 category, it is Rs 12-18 lakh. As part of the revised guidelines under PMAY 2.0, an increase in? ?the maximum loan amount of Rs 12 lakh for availing loan subsidy, is being contemplated.
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Post-budget, the Centre has reworked the LTCG regime to provide relief to property owners while selling the property. In the budget, the indexation benefit under LTCG was withdrawn?and to compensate for this, LTCG tax rate was decreased from 20 percent to 12.5 percent. But now under the revised LTCG policy, the property sellers are given a choice to opt for either lower tax without indexation benefit or higher tax with indexation benefit.
This year’s budget provided a? big boost to infrastructure development. As infrastructure is a key to real estate growth, the union government, post-budget approved 8 high speed corridors for road projects worth Rs 50665 crore. Moreover, a new revised financing structure for Bharatmala is being envisaged. Under Bharatmala , a total road length of 34800 km is to be constructed in 31 states and union territories ,covering over 550 districts.
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