The real estate industry, under the grip of a severe global down turn in 2009, is all set to feed onto opportunities that the new segments that were untapped until recently, have to offer. The wish list for the 2010 union budget has some familiar demands and a couple of new ones.

Housing sector, which constitutes over 70 per cent of the real estate sector, will by 2012 be facing a shortage of about 26.53 million houses. And most industry demands hover around fulfilling this requirement to buffet their positions.

A deduction to the extent of Rs 1.50 lakh is available on housing loan interest payment. Assuming an interest rate of 10 per cent per annum on a home loan, the current deduction benefits house buyers of up to Rs.15 lakh.

Analysts say property value in cities is much larger than this amount. ``We would recommend an upward revision of this limit of at least Rs 3 lakh. Consequently, the benefit of interest deduction can be linked to the income of the beneficiary and only those individuals falling below a certain income limit benefit from this deduction,'' says Pranab Datta, vice chairman & managing director, Knight Frank India.

Developers have called upon finance minister Pranab Mukerjee for a separate deduction to the tune of Rs 1 lakh for the housing loan repayment or increase in overall deduction to Rs 2 lakh. While the limit of deduction is raised, this deduction can be restricted to individuals up to a certain income. Affordable housing being the new mantra for even major players, realtors have demanded that income tax exemption under Section 80 IB (10) should be extended to include projects constructed after March 31, 2008. The benefits under the section do not percolate to the intended recipients. Certain loopholes were addressed by the 2009-10 budget. But, much more needs to be done to help the middle class.

Along with restriction on the size of housing units, a restriction on the value of the apartment and eligibility of buyers based on income will also serve the cause. The scheme has to be redesigned in a manner that makes it user friendly.

To pursue affordable housing, the industry has proposed integrated township projects with infrastructure status. With this status, these projects will have a better access to funds.

Rajesh Vardhan, managing director, Vardhman group says there has been an increase in cost of living and the minimum tax exemption should be raised to Rs 2 lakh. Similarly, exemption of interest on loans should be raised from Rs 1.5 lakh to Rs 2.5 lakh. This will help increase the construction of flats less than 1,000 sq. ft built up area. Section 80 IB should be reintroduced for a term of another five years.

Income tax exemption for builders is also high on the wish list. Says Pradeep Jain, chairman of the Parsvnath Group: ''I expect the finance minister to extend the date of tax concessions under Section 80 IB of the Income Tax Act.” Other demands of the realty sector include higher FSI and industry status.

External commercial borrowing (ECB) is allowed for development of townships and a further extension of this will help increase the housing stock. The cost of borrowed funds for developers is high and the availability of long term loan is also not easy. Analysts say it will serve as a great incentive to increase the access to overseas funds at lower cost. They have also said that the deadline for ECB in development of townships be extended to December 31.

The sector has demanded that stamp duty rates on property transactions be brought down and the government should make them uniform across states.

Referring to cheaper houses for lower and middle class, BG Vyas, president, RAK Ceramics, said: