The recent removal of indexation benefits from real estate investments, as announced in Budget 2024, has left the market in a state of uncertainty. This change could significantly impact long-term property holders, leading to higher capital gains taxes and potentially altering investment strategies. Ms. Gunjan Goel, Director at Goel Ganga Developments, highlighted the challenges this poses, stating that without indexation, investors might face higher tax liabilities, which could discourage the traditional buy-and-hold strategy in real estate. She also suggested that this could lead to increased house turnovers and a short-term rise in property prices as sellers attempt to pass on their tax burden to buyers. To mitigate these impacts, Goel advises property owners to consider value-enhancing renovations or strategic selling before the new rules take effect, ensuring they preserve as much of their existing tax advantages as possible.
Read More: Money-Wise: With ‘indexation’ gone in real estate, is property still best investment for Indians?
