If you thought that this year’s budget gave a miss to the real estate sector, a closer look at it will change your mind. Though the financial statement has only a few direct provisions pertaining to reality, many of its other proposals are likely to have an indirect yet beneficial effect on immovable properties. Read on to know how.

Let’s begin with the direct effects of budget 2018 on real estate:


  • Housing For All


With the vision of providing a home for every poor citizen by 2022, the budget has proposed to build more than 1 crore houses under Pradhan Mantri Awas Yojna (PMAY) in the rural area. Likewise, 37 lakh houses have been slotted for the urban regions. This will expand the availability of construction labourers. Also, it shall boost the growth of industries auxiliary to real estate, viz. cement, sanitary ware, paints, etc.


  • Increased demand by house buyers


Experts have forecasted the likelihood of this as the government has proposed to ease the availability of credit for affordable homes. Moreover, the budget has also promised to establish Affordable Housing Funds in the National Housing Bank by initiating the use of fully serviced government bonds. This will improve the buying capacity of many as it implies more funds to sanction loans.


  • Tax Relief


This is nothing short of a good news for both buyers and sellers for all types of immovable property. From now onwards, while purchasing or selling any property, if the circle rate (the minimum value) does not exceed 5% of the consideration (market value), then you are bound to enjoy some tax relaxation.


Now, let’s give you a glimpse of the budget’s indirect impact on the real estate sector:


  • The reduction of the corporate tax to 25% for MSMEs (Micro, Small and Medium Enterprises) earning up to 250 crores is a positive sign for several businesses in their nascent stage. This means more attraction for upcoming startups which further indicates more investment in corporate reality.
  • Many finance gurus are viewing the allocation of 50 lakh crore for enhancing the infrastructure as a magnet for prospective foreign investments in the near future. Such investments will naturally raise the land value of many regions.
  • It’s also anticipated that tier 2 and 3 cities are soon going to be the next hotspots for property investments if the proposal of developing the 4 lakh KM road and rural infrastructure are carried on efficiently.
  • Lastly, steps to digitize transactions can save your money. Digital documentation is assumed to bring in more transparency and reduce the chances of getting looted by frauds.


Due to no changes in the income tax and GST slabs, the urban population may not feel the impact of the budget directly but it surely aims at the development of the real estate sector as a whole.  So without any fiscal fears go ahead and buy your dream home today.

Last updated on February 21, 2018

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