Real estate stocks rose on Wednesday after the government provided tax relief for homeowners who bought their properties before July 23, 2024. These homeowners can now choose between two different tax rates for long-term capital gains (LTCG) tax.
Macrotech Developers, based in Mumbai, saw its shares increase by 2.1%. Oberoi Realty and DLF shares went up by 2% and 1.7%, respectively, on the National Stock Exchange (NSE). Shares of Prestige Estates Projects Limited rose by 1.1%, Mahindra Lifespace Developers Ltd by 0.9%, Godrej Properties by 0.8%, and Sunteck Realty by 0.2%.
The NIFTY Realty index increased by 1.1%, and the BSE Realty index went up by 1%. However, Brigade Enterprises and Phoenix Mills Ltd were the only stocks that fell, by 0.9% and 0.2%, respectively.
The Budget 2024 had initially proposed reducing the LTCG tax rate from 20% to 12.5% while removing indexation benefits, which adjust for inflation. This change took effect on July 23, 2024, and was expected to increase the LTCG tax burden.
Under the amendments to the Finance Bill, 2024, individuals and Hindu Undivided Families (HUF) who bought houses before July 23 can choose between the new 12.5% tax rate without indexation or the previous 20% rate with indexation.
