With almost five lakh housing units stuck in various stages of construction across cities, homebuyers hope that Budget 2023 will focus on putting more money in their hands and introduce schemes that will help complete the ‘legacy’ real estate projects stalled for over a decade.
Homebuyers say high interest rates have dented affordability and is beginning to hurt their repayment capacity. They want the government to enhance the tax rebate on housing loan interest from Rs 2 lakh to at least Rs 7 lakh.
“Interest rates on home loans have gone up sharply over the last one year and put a dent on homebuyers’ affordability. We hope the government takes a serious look at this and provides us some relief in the form of either a subvention scheme or full deduction on interest under a separate head,” said Abhay Upadhyay, the Forum for People's Collective Efforts, a pan-India homebuyers' body.
Homebuyers should also be incentivised for buying homes from RERA-registered projects. “This will encourage them to buy only into real estate projects that are registered with RERA and bring more builders under the ambit of the regulator. All legacy projects (pre-RERA-registered projects) that have been delayed for more than a decade need to be identified and the government should introduce a scheme to find relief for such buyers and to ensure that these projects are completed,” he said.
Abhishek Kumar, president, Noida Extension Flat Owners Welfare Association (NEFOWA), also said that the focus should be on completing thousands of projects that are stuck across the country.
“There are thousands of buyers who have been waiting for their homes for the last 12 years. That’s primarily because some builders have abandoned the projects mid-way, leaving the buyers in the lurch and in many cases the buyers have paid almost 100 percent of the cost of the apartment. It’s their hard-earned money gone down the drain,” he said.
The government should seriously consider bringing in a policy wherein all the projects that have been abandoned and are stuck are completed, he says.
The other issue is to do with registrations. There are more than 70,000 homes in Noida where buyers have been forced to take possession of their homes without registrations.
“This is on account of builder dues pending before the authorities. Why do homebuyers have to suffer despite having paid up 100 percent cost of the apartment. It’s a battle between the builders and the authorities. The government has to give a serious thought to this and device a scheme to ensure that their homes are registered,” he said.
The rate of interest on home loans should be reduced. “It should ideally be in the range of 5 to 6 percent. Inflation has touched the roof and made both buying and servicing home loans unaffordable,” he said.
“The government should consider providing tax relief to homebuyers whose projects are stuck. Projects that are under construction should be exempt from the Goods and Services Tax. Interest rates have gone up so much so that we are paying more than 10 percent of the total flat cost,” said Amit Patil, a homebuyer from Mumbai.
Kshitij Gupta, a prospective homebuyer from Mumbai, says that the increase in the tax rebate on housing loan interest will greatly benefit first time homebuyers. “It will help me and many middle class families to purchase their dream home.”
He also wants that the government should consider giving some tax incentives to developers who are into redevelopment. “Any incentive (even increased floor area ratio) to promote redevelopment will encourage more developers to get into this segment and help rationalise prices in Mumbai,” he said.
Dhananjay Padmanabhackar, a homebuyer from Bengaluru, hopes the finance minister to include an increase in the tax rebate on housing loan interest from Rs 2 lakh to at least Rs 8 lakh. “We want the FM to give us some relief for the home loan interest so that our affordability improves. Otherwise a huge part of our income will go into paying home loan EMIs.”
Real estate consultants also agree that there have not been too many direct sops for homebuyers in the recent past and this is being expected from the upcoming Budget.
"While the industry (real estate) will look for higher budgetary allocations, easier capital availability and greater relaxations, the middle-class population, which has not had many direct sops in the recent past, will eagerly look forward to direct benefits like tax-cuts or higher deductions," Anurag Mathur, CEO at Savills India.
"Increased funding for social welfare programmes, measures to control prices of essential goods and services, and initiatives to create job opportunities, etc, will all be expected from the upcoming Budget."
"An area of high priority for the government is increasing tax benefits for home buyers. Raising the cap for deducting interest payments on home loans to Rs 5 lakh is a real need and should be a key consideration. Further, higher allocation for the SWAMIH fund will be a great help for stalled projects. Several sectors like life sciences, data centres, EVs, warehousing, etc., are poised for high growth in India. Infrastructure status for real estate sector will act as a catalyst for these sectors too,” he said.
With inputs from Mehul Thakkar, Souptik Datta and Vandana Ramnani
