The Confederation of Real Estate Developers' Associations of India (CREDAI), representing over 13,000 developers, has urged the government to introduce a fixed 15% income tax rate for affordable housing projects in the upcoming Union Budget 2025. The industry body believes this measure will encourage developers to prioritize affordable housing, addressing the increasing demand for low-cost homes.
Revise Affordable Housing Definition, Enhance Tax Incentives
CREDAI has also proposed revising the affordable housing definition, which currently caps the price at Rs 45 lakh - a limit unchanged since 2017 despite a 50% rise in real estate prices. The organization recommends aligning this cap with current market realities to make affordable housing projects viable for developers and accessible to buyers.
Additionally, CREDAI suggests increasing tax deductions for individuals on home loan principal and interest payments to make homeownership more affordable.
Declining Affordable Housing Supply: A Growing Concern
Highlighting the falling share of affordable housing in the total fresh supply over the past few years, CREDAI has emphasized the urgent need to reverse this trend. The declining availability has also affected the overall sales of affordable homes, making it a critical issue for the sector.
Real Estate: A Pillar of Economic Growth
CREDAI National President stated, "The Indian real estate sector significantly contributes to GDP, employment generation, and infrastructure. Currently influencing 53% of the GDP (directly and indirectly) and employing over 8 crore people, this sector is pivotal in meeting the housing needs of 40 crore Indians who lack adequate homes."
With a vision to deliver 7 crore homes and generate 2 crore new jobs in the next seven years, CREDAI's recommendations aim to address structural challenges and unlock the sector's potential. The association remains optimistic that these measures will boost growth, empower homebuyers, and support India's economic aspirations.
CAclubindia
