Why Luxury Housing Market Seeing Huge Demand After Budget 2023 Announcement
Source: News 18 http://bit.ly/41h2htF
DMart’s Radhakrishna Damani closing India’s perhaps largest housing deal, Godrej Properties buying Raj Kapoor’s iconic Chembur Bungalow, and DLF announcing sell-out of 1,137 luxury apartments in just 3 days — these recent developments are showing a significant jump in the luxury real estate demand in India. Though experts said the surge in demand for luxury housing is an indication of people looking for a lifestyle that mirrors their achievements and ambitions, it is also coming close on the heels of a Budget 2023 provision that will be implemented from April 1.
What Is the Budget 2023 Provision on Real Estate?
Finance Minister Nirmala Sitharaman in her Budget Speech 2023 on February 1 announced, “For better targetting of tax concessions and exemptions, I propose to cap deductions from capital gains on investment in residential house under Section 54 and 54F to Rs 10 crore.”
Shabala Shinde, partner (tax) at Grant Thornton Bharat, said, “Currently, deduction is available to individuals and HUFs without any monetary limit from capital gains arising on transfer of long-term capital asset if such capital gains or net consideration is reinvested in new residential property within a period of one year before or two years (three years if property is constructed) after the date of transfer. The Budget 2023 proposes to limit this deduction to Rs 10 crore. Hence, any capital gains in excess of INR 10 crores will now be subject to capital gains tax.”
Luxury Realty Demand Outlook This Year: What Experts Said
Shinde said “While this (rules from April 1) may have some impact on the demand for luxury homes, there are other aspects as well, which will be relevant. For instance, after COVID-19, there is a preference for a safe and spacious home with lavish amenities. This has been one of the major contributors to the surge in demand for the luxury home segment.”