CREDAI Hyderabad, the apex body of real estate developers in Hyderabad, welcomes the recent budget announcements aimed at bolstering the real estate sector and fostering inclusive growth in the region. The organization remains committed to collaborating with the government and stakeholders to ensure the successful implementation of these initiatives.
President of CREDAI Hyderabad, Mr. V. Rajashekhar Reddy, expressed his optimism about the budget proposals, emphasizing the significant infrastructure investments and land-related reforms outlined in the budget. Also the focus on affordable housing as a part of PM Awas Yojna 2.0 to develop 1 Crore homes for the urban poor and middle class families with an investment of 10 Lakh Crore, will provide an impetus to the Real Estate Sector. He also highlighted the alignment of the Telangana Government’s efforts with the Union Budget initiatives, creating a synergistic effect that strengthens the real estate market in the state.
“Investments in infrastructure, urban planning, and digitization of land records are crucial steps towards enhancing the real estate sector in Hyderabad. We believe that these measures will not only boost the sector’s contribution to the economy but also address the housing needs of millions, driving inclusive growth and development,” stated Mr. Reddy.
Mr. B. Jagannath Rao, the General Secretary of CREDAI Hyderabad, has highlighted some noteworthy points regarding the recent changes in capital gains tax rates for the real estate sector. Here is a summary of the key benefits highlighted by him:
*Simplification and Rationalization of Tax Rates*:
– The recent changes in the budget have simplified and rationalized capital gains tax rates. A uniform long-term capital gains rate of 12.5% has been introduced for all asset classes, making the system more straightforward.
*Reduction in Capital Gains Tax on Real Estate*:
– The reduction of capital gains tax on real estate properties from 20% to 12.5% is a significant change. This reduction is expected to stimulate investment in the real estate sector, boost real estate transactions, and improve returns for investors.
*Property Values Indexation*:
– Property Values Indexed Up to 2001: The indexation benefits for properties held before 2001 have been preserved (grandfathered). This allows the valuation of these properties to be adjusted for inflation up to the year 2001 when calculating capital gains tax.
– Abolition of Indexation Benefits: The removal of indexation benefits for calculating capital gains tax on real estate will not affect properties held before 2001. These properties will continue to enjoy the indexation benefits.
– Legacy Assets: Properties classified as legacy assets and those acquired before 2001 will still receive indexation benefits, helping to reduce taxable capital gains by adjusting the purchase price for inflation.
Therefore, the benefit of indexation for properties acquired before 2001 remains intact, ensuring that the valuation of such properties can still be adjusted for inflation up to 2001 when calculating capital gains. This provides reassurance that the indexation benefits will not be withdrawn for these old properties. It is advisable for property owners to review the implications of these changes on their investments and tax planning strategies.
Mr. Rao further added
Positive Impact on the Real Estate Market in Hyderabad:-
The reduction in tax rates is anticipated to have a positive impact on the real estate market in Hyderabad. The budget also outlines the development of capital investment for economic growth at the Orvakal node on the Hyderabad-Bengaluru Industrial Corridor. This growth and development will benefit the Hyderabad region and is aligned with the revival of the ITIR policy pursued by the state government.
Expectations for Affordable Housing:
Although the budget did not include evident tax sops to boost affordable housing, CREDAI Hyderabad is hopeful for more details in the fine print. The organization looks forward to potential initiatives that could further support affordable housing.
Collaborative Efforts for Economic Development: CREDAI Hyderabad is committed to working closely with the government and stakeholders to leverage these budget initiatives.The goal is to benefit the real estate industry and contribute to the overall economic development of the region.
He expressed his optimism about the positive changes and the potential for further collaboration to enhance the real estate sector’s growth in Hyderabad.
