Finance Minister Nirmala Sitharaman recently announced the Union Budget 2024, which included a number of innovative policies aimed at promoting real estate growth. As Bangalore remains a popular destination for real estate investment,understanding how these budgetary changes will impact the market is critical for buyers, investors, and developers alike.

1. Key Highlights of the Budget include plans for affordable housing.The budget has budgeted ₹2.2 lakh crore for urban development over the next five years, aiming to increase affordable housing alternatives in Bangalore.
2. Infrastructure Development: The budget prioritizes infrastructure investment, with plans to create “plug and play” industrial parks in 100 locations, including Bangalore. This will encourage industrial investment and boost demand for both residential and commercial properties.
3. Long-Term Capital Gains Tax Changes: The budget proposes lowering the long-term capital gains tax (LTCG) from 20% to 12.5%. However, the elimination of adjustment benefits may result in increased tax liability for property sellers, particularly those with shorter holding periods. 
4. Rental Housing for Industrial Workers: The budget proposes dormitory-style accommodations for industrial workers, which could open up new opportunities for Bangalore developers specializing in inexpensive and rental housing.
5. Urban planning and sustainable development are expected to improve living conditions in Bangalore, making it more appealing to potential homebuyers and investors.

Potential Impacts on the Real Estate Market.

• Increased Demand for Affordable Housing: With the government’s commitment to affordable housing, developers in Bangalore are likely to ramp up their projects, catering to the growing demand from the urban poor and middle-class families.
• Enhanced Investment Opportunities: The focus on infrastructure and industrial development will likely attract more investments into the real estate sector, creating new commercial and residential opportunities in and around Bangalore.

• Market Reactions to Tax Changes: The changes in LTCG tax may lead to a mixed response from investors. While some may hold onto their properties longer to avoid higher tax liabilities, others might see this as an opportunity to reinvest in the market, particularly in affordable housing projects.

• Long-Term Growth Prospects: The budget’s holistic approach to urban development, including improved connectivity and infrastructure, positions Bangalore for sustained growth in the real estate sector over the coming years.

Conclusion

The Union Budget 2024 has set the stage for a positive transformation in Bangalore’s real estate market. By focusing on affordable housing, infrastructure development, and sustainable urban planning, the government aims to create a more balanced and inclusive growth environment. For buyers, investors, and developers, the budget offers both challenges and opportunities that will shape the future of real estate in Bangalore. As the city continues to evolve, staying informed about these developments will be key to making sound investment decisions.