Why Luxury Housing Market Seeing Huge Demand After Budget 2023 Announcement

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. 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 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 after the date of transfer. Pasricha & Co, said, “This will impact the HNIs who enjoys the benefit of deduction u/s 54 / 54F claiming deduction of more than 10 crores and will be a boon for the revenue as it will help in targeting of exemptions claimed by the assessee.” Grant Thornton Bharat’s Shinde said the amendments will impact HNIs as the rollover benefit of long-term capital gains is proposed to be capped at Rs 10 crore and capital gains/ net consideration in excess of this limit will suffer capital gains tax at 23.92 per cent.