CREDAI Proposes 100% Home Loan Interest Deduction, Revised Affordable Housing Limits

Realtors’ apex body, CREDAI, has called for significant reforms in housing policies to enhance demand for affordable and mid-income housing. Celebrating its 25th foundation day, CREDAI demanded a 100% deduction on interest paid on home loans under the Income Tax Act and an upward revision of the affordable housing definition.

CREDAI President Boman Irani proposed raising the affordable housing cap from Rs 45 lakh to Rs 75-80 lakh, considering inflation since 2017. He suggested lowering GST on under-construction homes costing up to Rs 75-80 lakh to 1%, aligning with the current 1% GST rate for affordable homes priced below Rs 45 lakh. Irani argued that redefining affordable housing would benefit homebuyers and stimulate demand.

Alternatively, CREDAI recommended removing the price cap for affordable housing and relying solely on carpet area—60 sq. m for metros and 90 sq. m for non-metros. Irani stressed the importance of reducing taxes to increase disposable income and drive homeownership.

Shekhar Patel, CREDAI’s President-Elect, emphasized a 100% deduction on home loan interest, replacing the existing Rs 2 lakh limit under Section 24 of the Income Tax Act. “This measure will significantly boost housing demand,” he noted.

CREDAI Chairman Manoj Gaur highlighted the challenges developers face, particularly the 12-18 months required to obtain government approvals for real estate projects. He called for streamlined processes to improve the ease of doing business.

Founded in 1999, CREDAI represents over 13,000 members nationwide, advocating for policies to make housing more accessible and affordable.