Budget 2023 : Real Estate Sector Expectations


2022 has been a good year for Indian real estate. Rising mortgage rates, rising inflation, and slowing external demand are heating up the upcoming budget.

Steps to boost demand in mid and affordable housing segments.

Offers should be made available to homebuyers to stimulate demand in this segment. Previously he was extended until March 31, 2022. This could give a boost to affordable rental housing.

Rental income tax exemption

One of the core demands is for the government to take steps to promote and strengthen the rental housing market through tax incentives. Measures such as rent deductions and tax incentives for rental income can be expected. This will ease pressure on the residential real estate sector and make it more attractive to investors.Moreover, it can also boost the growth of much-needed rental housing in India.

Input cost reduction 

 Raw material costs have been rising steadily over the past three years and peaked in March 22 due to supply chain constraints. Average construction costs increased by 10-12%year-over-year. The government should take steps to reduce its GST on such materials, especially cement,which accounts for 28% of the total cost.

Stimulating foreign investment

Governments should consider offering tax incentives to international investors to encourage foreign investment in this sector. This will not only help developers diversify their funding base but also provide a much-needed boost to struggling sectors. In addition, new opportunities for international cooperation in terms of technology and innovation are also opened. A reduction in the withholding tax rate on foreign direct investment would also provide a much-needed boost to real estate growth

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