- Special focus on affordable housing in the Union Budget
- Udit Jain, Director, One Group
Udit Jain, Director of One Group, expressed concerns over the significant increase in land and construction material prices in metropolitan cities and across the country over the past few years. As a result, property prices have risen substantially alongside steady demand, making homeownership a challenge for many.
He emphasised the urgent need for strong government support for the real estate sector, particularly the housing segment, to make home buying more accessible to aspiring buyers. Jain suggested that government intervention and targeted incentives could help reduce the financial burden on homebuyers.
A key issue to be addressed in the upcoming budget, according to Jain, is increasing the income tax exemption limit on home loan interest under Section 24(b), which has remained unchanged for decades. Increasing this limit would provide significant relief to buyers, especially in high-priced urban markets. Additionally, the extension and expansion of the Credit Linked Subsidy Scheme (CLSS) is another important issue. Jain recommended that the government consider raising the property price limits for affordable housing eligibility, which would allow more middle-income families to benefit from this scheme.
Such adjustments would not only increase demand but also encourage developers to focus on affordable housing projects. He pointed out that the sector is currently facing stagnation in supply and would benefit from these proposed changes.
Rationalising stamp duty rates will significantly increase housing demand, especially in Tier-II and Tier-III cities among middle-income and low-income groups. High stamp duty rates are financially burdensome for homebuyers, and reducing them could further boost housing purchases in developing markets.
A challenging issue for the government is addressing the disparity between circle rates (also called collector rates) and current market prices in certain cities like Bhiwadi, Tijara in Rajasthan, and Agra in the north. In these regions, circle rates often exceed actual market prices, which leads to challenges in completing transactions between buyers and sellers. This disparity creates significant issues for both parties, including tax-related complications. The difference between market rates and circle rates is considered as notional gains.
In this context, rationalizing circle rates with market values would facilitate smoother transactions and reduce issues, as noted.
