With the Union Budget 2025-26 on the horizon, expectations are running high across India’s real estate sector as stakeholders await potential policy reforms aimed at driving growth and addressing long-standing challenges. Leaders from various organizations have offered insights and predictions, urging the government to implement changes to bolster housing affordability, streamline taxes, and support sustainable development.
Prashant Sharma, President of NAREDCO Maharashtra, emphasized the importance of increasing budgetary allocations for affordable housing initiatives like the Pradhan Mantri Awas Yojana (PMAY-U). He stated, "...it is imperative to increase budgetary allocations for affordable housing and expand credit-linked subsidies." This call for enhanced support is echoed among industry professionals, who believe such measures are foundational for ensuring homeownership becomes more accessible.
One of the significant anticipations is the proposal to revise the tax deduction limit for home loan interest under Section 24(b) from the current ₹2 lakh to ₹5 lakh. This adjustment was highlighted by industry leaders as pivotal for encouraging homeownership and stimulating demand within the housing market. Lachman Ludhani, Chairman and Managing Director of Evershine Group, remarked, "...the upcoming budget can reignite home-buying interest by introducing..." tax reforms. Such fiscal incentives could serve as strong motivators for middle-income buyers, particularly amid rising property prices.
The need for granting industry status to the real estate sector has been voiced by several stakeholders, as this change could facilitate easier access to institutional funding at lower interest rates. Kuldeep Jain, Founder and CEO of Build Capital, mentioned, "...easier access to institutional funding at lower interest rates..." would greatly benefit mid-segment and affordable housing projects. This status is seen as instrumental for attracting investments and enabling developers to thrive.
Another pressing issue is the current Goods and Services Tax (GST) structure, with many advocating for its rationalization. Stakeholders propose implementing a uniform GST rate along with input tax credits for both residential and commercial projects. This reform would alleviate the financial burdens on developers, making housing more affordable for buyers. Rohan Khatau, Director of CCI Projects, asserted the need for "...streamlining GST rates on under-construction properties..." to bring clarity to the taxation system and improve market confidence.
Beyond specific tax reforms, there is also strong support for incentivizing sustainable practices within the real estate sector. Leaders argue for subsidies and tax rebates for green building certifications and the integration of eco-friendly technologies. Many see these moves as aligning with India's commitment to environmental sustainability. Shraddha Kedia-Agarwal, Director of Transcon Developers, stated, "the introduction of subsidies or incentives for green building certifications...would be a welcome move." This reflects the growing importance of sustainability amid urban development.
Infrastructure investments also feature prominently among the expectations for the upcoming budget. The need for enhanced connectivity through metro rail networks and urban transport initiatives is seen as integral for unlocking new real estate corridors and driving growth. For example, Samyak Jain, Director of Siddha Group, noted the essence of "increased budgetary allocation to infrastructure development" to support real estate demand.
Leaders believe the 2025-26 Union Budget presents not only opportunities for addressing sector challenges but also the possibility of propelling India's real estate market toward sustainable growth. The collective anticipation across the sector is not just about fiscal relief; it’s about creating an ecosystem where developers, investors, and homebuyers can flourish. The call for progressive policies reflects the aspirations of millions seeking affordable housing options and the overarching goal of India's economic development.
Overall, as we approach the Union Budget 2025-26, the real estate sector stands at a pivotal juncture, with leaders expressing hope for inclusive reforms and measures. The budget is seen as instrumental for fortifying the foundations of the sector, ensuring it continues to be a key player in driving India’s economic growth.