Union budget 2022-23 likely to focus on affordable and rental housing in realty sector

The upcoming union budget 2022-23 has set high hopes for the real estate sector along with relaxations in taxes to make it more affordable. The realty sector currently ranks third among the 14 major sectors in aspects related to direct and indirect or induced impact on all the sectors of the economy. To make it rise further, leading realtors are hopeful of having favorable policies pertaining to the retail and housing sector.

The union budget 2021 had allocated Rs 54,581 crore to the Ministry of Housing and Urban Affairs to boost infrastructure, make way for affordable housing, ensure debt financing for REITs and InVITs and tax deduction on home loan interest. Hoping for similar or more benefits, the realty sector expects a renewed focus on affordable and rental housing so that the current financial system can be strengthened to provide liquidity to the already stuck real estate projects. Experts say that section 80 IBA registration timeline by 12 months can further boost the affordable housing scheme viability.

With the goal of continuing the promotion of affordable rental housing scheme, government is expected to provide tax exemptions to notified rental housing products. It will enhance the pace of investments in this scheme, hence achieving the ‘Housing for all’ objective.

Under the Pradhan Mantri Awas Yojana–Urban (PMAY-U), 114.06 lakh houses have been sanctioned, out of which 52.55 lakh have already been delivered. Foundation stones for 89.36 lakh projects have been laid and 3,131 projects under the Smart Cities Mission have already started. Additionally, the government has also extended the deadline for providing pucca houses to all families in the rural areas till 2024. Under the flagship of Pradhan Mantri Awas Yojana-Gramin (PMAY-G), an extra funding of Rs 2.17 lakh crore will be given to achieve the target of 2.95 crore.

The housing projects that were not completed in FY21 will be accomplished by FY2022. To accommodate the previous loss, an increased expenditure of Rs 1.71 crores will be added within the expected FY2022 budget. As per the realty experts, reduction of litigation and compliance issues and increased tax certainty is of significant importance to tackle the problems faced by the real estate sector. 

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