The interim budget unveiled on Friday was tilted in favour of second-time homebuyers, offering benefits extending from long-term capital gains (LTCG) to exemption on notional rent earned on the second house and relief on tax deducted at source (TDS) for rental income of up to ₹2.4 lakh.“These changes will have an impact on investors and the homebuyers, upgrading the overall demand situation in the real estate market,” said Pankaj Kapoor, founding and managing director at Liases Foras, a Mumbai-based real estate research and ratings firm.To begin with, the interim budget has proposed to do away with income tax levied on the notional rent on a second, self-occupied house. What does this mean? It has proposed to extend the benefit of self-occupied property to two houses. If you own a house which you reside in, and you own another house that is lying vacant, as of now you have had to pay tax on a notional rent you would have earned on the second house. Now, that will be tax- exempted. “This change will make it easier and lucrative for you to invest in properties and hence boost demand,” said Kapoor.Another change is the extension of the capital gains tax if you invest in two houses. Say, you sell a house and invest the proceeds from the sale (also known as capital gains) in two residential properties. Currently, you can save long term capital gains (LTCG) arising from sale of the property by investing it in one house. Now it has been proposed that you can invest it in two houses and save LTCG. The interim budget this year has proposed to extend the tax exemption benefit to two residential houses. “You need to buy the house within two years of selling the property to avail of the benefit,” said Shashi Baijal, chairman and managing director of Knight Frank LLP, a real estate agency.In case you have rental income, you don’t need to pay TDS from rent of up to ₹2.4 lakh, an increase from ₹1.8 lakh currently. In their entirety, the reforms proposed in the interim budget will benefit the affordable housing segment, investors and second-time homebuyers, according to the experts.For developers, the budget has proposed to extend the period of tax exemption on the notional rent on unsold inventories from one to two years starting on the project completion date. On the supply side, there is a lot of unsold inventory in the real estate market because of muted demand from homebuyers. “Earlier, after a period of one year, unsold inventory was considered as stock-in-trade. Now that period has been extended to two years,” said Kapoor.“This is a welcome move and will benefit the housing sector, as currently there are more than 6.73 lakh unsold units across the top seven cities,” said Anuj Puri, chairman of Anarock Property Consultants.The government has also set up a group of ministers to review whether the Goods and Services Tax (GST) could be reduced for real estate.