Union Budget 2025-26: Pre-Budget Expectations For The Real Estate Sector

(1)
By Prashant Sharma, President, NAREDCO Maharashtra
As we approach the Union Budget 2025-26, the real estate sector looks forward to policy initiatives and reforms that can drive growth, enhance affordability, and address long-standing industry challenges. The sector, a critical contributor to the nation’s GDP and a significant employment generator, requires sustained focus and support to maintain its upward trajectory.
 
1) Boosting Housing Affordability:
To ensure the success of initiatives like PMAY-U, it is imperative to increase budgetary allocations for affordable housing and expand credit-linked subsidies. Additionally, revising income tax deduction limits under Section 24(b) for home loan interest from ₹2 lakh to ₹5 lakh can further enhance housing affordability, encourage homeownership, and boost the flow of funds into the affordable housing sector, which has seen a slowdown in recent months.
 
2) Industry Status for Real Estate:
Granting industry status to the real estate sector remains a key demand. This will enable easier access to institutional funding at lower interest rates, particularly for mid-segment and affordable housing projects.
 
3) Rationalization of GST:
A uniform GST rate with input tax credit for residential and commercial projects can significantly reduce costs and streamline taxation. Additionally, reducing GST rates for under-construction properties can encourage buyers and increase project sales.
 
4) Incentivizing Sustainable Development:
The government should promote green and sustainable real estate practices through tax rebates and incentives for developers adopting eco-friendly building technologies and materials. This aligns with India’s commitment to achieving carbon neutrality.
 
5) Focus on Infrastructure Development:
Continued investments in urban infrastructure, including metro rail, highways, and smart cities, will boost real estate development in peripheral areas and unlock new growth corridors.
 
6) Ease of Doing Business:
A single-window clearance mechanism for approvals, reduced compliance burdens, and clear land title policies will streamline project execution and attract domestic and foreign investments.
 
7) Support for REITs and Focus on Rental Housing:
Encouraging investments in Real Estate Investment Trusts (REITs) through tax benefits and regulatory support can provide liquidity to the sector. Similarly, Rental housing can play a pivotal role in addressing urban housing shortages and supporting the mobility of the workforce. The government should introduce incentives and policy support for developing affordable rental housing complexes, ensuring access to quality housing for tenants.
 
We are hopeful that the Union Budget 2025-26 will introduce measures that empower the real estate sector to thrive, creating opportunities for developers, homebuyers, and allied industries. By addressing these critical areas, the government can unlock the true potential of India’s real estate sector as a pillar of economic growth and development.

(2)
By Kuldeep Jain, Founder & CEO, Build Capital
As the Union Budget 2025-26 approaches, the real estate and infrastructure sectors are hopeful for a budget that drives growth and addresses long-standing industry concerns. Here are critical expectations:
 
Tax Reforms: Increasing the tax deduction limit under Section 24(b) for home loan interest, currently capped at ₹2 lakh, would provide much-needed relief to homebuyers, especially in metro cities where property prices are high.
 
Affordable Housing Project: Extending the benefits of Section 80-IBA for affordable housing projects upto March 2029 would encourage more developers to venture into affordable real estate projects development and government mantra of Housing for all gets fulfilled.
 
GST Tax Rate reduction and Streamlining: The current GST regime remains ambiguous and poses a significant challenge for developers. Simplifying, streamlining and reducing GST Tax rates is imperative to reduce complexities and alleviate the financial burden on developers.
 
Demand for Industrial Status: The long-standing demand for granting industrial status to the real estate sector must be addressed. This will enable easier access to financing, reduce borrowing costs, and boost investor confidence.
 
Rationalization of Stamp Duty: Stamp duty rates in certain states, currently as high as 8-9%, are a major financial burden for homebuyers. Rationalizing these rates across states for homes upto Rs 1.50 crores is crucial to make property ownership more affordable and drive housing demand.
 
Single-Window Clearance: A streamlined project approval system particularly High rise and Environment clearance etc will reduce delays and enhance ease of doing business.
 
Sustainable Development Incentives: The government must prioritize green building initiatives and sustainable construction practices by offering tax benefits or subsidies to developers adopting eco-friendly technologies. This aligns with India's commitment to its net-zero goals.
 
Global Investment Boost: Policies that attract Foreign Direct Investment (FDI) into real estate, especially in commercial and tech-driven investment segments, can further strengthen the sector. Simplifying regulatory frameworks and providing tax incentives for global investors will help position India as an attractive destination for international capital.
 
Real Estate Tech Adoption Fund: Offering incentives / allocating Funds for PropTech adoption and innovation will enable the sector to become more efficient and transparent.
 
Increased Allocation of funds for Infra Development: Increased budgetary allocation to infrastructure development, including metro networks and multimodal corridors, will catalyze the growth of commercial real estate in urban and peripheral areas.
 
Support for REITs, InvITs and Fractional Ownership platform: Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) have been instrumental in bringing transparency and liquidity into the sector. Reducing the dividend distribution tax and offering further incentives for retail investors can enhance their adoption.Moreover, fractional ownership platforms are democratizing access to high-value real estate assets, and the government should encourage their growth through comprehensive and supportive policies.

The Union Budget 2025-26 presents an opportunity to address these areas and propel the sector toward sustainable growth, benefiting developers, investors, and end-users alike.

(3)
By Rohan Khatau, Director, CCI Projects Private Limited
 
With the Union Budget 2025-26 around the corner, the real estate sector is keenly anticipating measures that will bolster growth and address critical challenges. Here are a few key expectations from the government to ensure sustainable progress and greater housing accessibility:
 
Enhanced Tax Benefits for Homebuyers
We urge the government to consider increasing the tax exemption limit on home loan interest under Section 24(b). Enhancing these benefits will significantly improve affordability for first-time homebuyers, especially in urban and semi-urban regions, where property prices remain high.
 
GST Rationalization
A unified and lower GST rate for under-construction properties will provide much-needed relief to homebuyers while encouraging demand in this segment. Currently, multiple tax layers create confusion and deter potential buyers.
 
Support for Affordable Housing
The extension and expansion of benefits under the Pradhan Mantri Awas Yojana (PMAY) will be crucial to bridging the housing gap. The introduction of new subsidies and incentives for developers focusing on affordable housing will accelerate the mission of ‘Housing for All.’
 
Focus on Rental Housing
With urbanization on the rise, promoting rental housing schemes will create a more structured rental market. This move will cater to a diverse population, including millennials and migrating professionals.
 
Single-Window Clearance Mechanism
Simplifying project approvals through a single-window clearance system will expedite project execution, reduce costs, and enhance investor confidence. It is a much-needed reform to drive efficiency across the sector.
 
Increased Budget Allocation for Infrastructure Development
Investment in infrastructure projects like metro connectivity, highways, and urban transport networks directly impacts real estate demand. Enhanced connectivity to peripheries will unlock their potential as emerging growth corridors.
 
Industry Status for the Real Estate Sector
Granting industry status to the real estate sector will open avenues for lower borrowing costs and improved access to institutional credit. This will strengthen developers' ability to deliver quality projects on time.
 
The real estate sector plays a pivotal role in driving economic growth and creating employment. Progressive and pragmatic measures in this year’s budget can act as a catalyst, fostering confidence among stakeholders and contributing significantly to India’s vision of becoming a $5 trillion economy.

(4)
By Vikas Sutaria, Founder, Iraah Lifespaces
As we approach the Union Budget 2025-26, the real estate sector remains optimistic about receiving the much-needed impetus to drive growth, affordability, and sustainability. It deserves focused attention to address its long-standing challenges and unlock its full potential. Key Expectations include:
 
Incentivizing Homebuyers through Tax Reforms
We urge the government to revisit the tax deduction limits under Section 80C and 24(b) of the Income Tax Act. An upward revision of the deduction limit for home loan principal repayment and interest on housing loans will significantly improve housing affordability and encourage homeownership, particularly in Tier II and Tier III cities.
 
Infrastructure-Led Growth
Increased investments in infrastructure development, such as highways, metro networks, and urban connectivity projects, will complement the real estate sector by enhancing the livability of emerging growth corridors.
 
Special Focus on Second Homes and Luxury Housing
Locations like Alibaug and Lonavala are witnessing increased demand for second homes and luxury villas. Tailored policies to incentivize investments in these high-potential segments will support the rising aspirations of affluent buyers.
 
The Union Budget 2025-26 has the opportunity to lay a solid foundation for a balanced and inclusive real estate sector.

(5)
By Shraddha Kedia-Agarwal, Director, Transcon Developers
The real estate sector looks forward to bold and progressive measures from the Union Budget 2025-26 to bolster its growth and contribute significantly to the nation’s economic progress.
 
Tax Incentives for Homebuyers and Investors:
Rationalization of GST rates on under-construction properties and a higher tax exemption limit for housing loans will incentivize homebuyers and ease their financial burden. Additionally, tax incentives for rental housing could attract institutional investments, benefiting urban renters.
 
Policy Push for Sustainable and Green Developments:
In line with the global focus on ESG (Environmental, Social, and Governance) criteria, the introduction of subsidies or incentives for green building certifications and renewable energy integration in residential and commercial projects would be a welcome move.
 
Single-Window Clearance Mechanism:
A simplified and time-bound clearance system will significantly enhance ease of doing business, enabling developers to complete projects on time and reduce costs.
 
Infrastructure-Led Development:
Budget allocations for mega infrastructure projects like new metro lines, highways, and urban transport systems will catalyze real estate demand in emerging growth corridors.
 
Boost for REITs and InvITs:
To deepen the investment market, reforms to make REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts) more tax-efficient and accessible to retail investors would stimulate institutional and global interest in Indian real estate.
 
Focused Benefits for NRI Investors:
Considering the growing interest of NRIs in Indian real estate, specific measures such as streamlined repatriation processes, reduced tax burdens on property transactions, and enhanced ease of investing in residential and commercial properties could significantly boost NRI investments.
 
The real estate sector has always played a pivotal role in driving India’s GDP growth and generating employment. We are optimistic that the upcoming budget will address these expectations and create a conducive ecosystem for developers, homebuyers, and investors alike.

(6)
By Samyak Jain, Director, Siddha Group
After a year of remarkable performance, the industry needs additional support from the Union Budget 2025-26 to maintain this growth trajectory.
 
Reinstating the enhanced deduction for interest on home loans would boost housing demand, especially in affordable and mid-segment categories, and encourage greater market participation. Targeted benefits, such as reduced stamp duty or subsidies, can make homeownership accessible to millennials and first-time homebuyers, a vital demographic driving housing demand.
 
Enhanced tax holidays and higher allocations for PMAY-U scheme will further the 'Housing for All' vision, expediting urban housing development. Tax benefits or subsidies for eco-friendly construction technologies and materials would support sustainable urban development and align with India's environmental goals. Lowering GST on under-construction properties and key materials like cement and steel would make housing more affordable and reduce construction costs.
 
A single-window clearance system would minimize project delays and reduce costs, enabling developers to deliver more efficiently.
 
These measures will provide the necessary impetus to the real estate sector, supporting its critical role in economic growth and nation-building.

(7)
By Govind Krishnan Muthukumar, Managing Director & Co-founder, Tridhaatu Realty
The real estate sector anticipates bold measures from the Union Budget to sustain its growth momentum while addressing challenges that impact both developers and homebuyers. The following key areas demand the government’s attention:
 
·        Increasing the tax deduction limit for housing loan interest under Section 24(b) would provide significant relief to homebuyers and stimulate demand. This move is especially critical to support the mid-income and affordable housing segments, which form the backbone of the sector.
 
·        Reinstating the tax holiday under Section 80-IBA for affordable housing projects and increasing the income ceiling for beneficiaries under PMAY-U would enhance housing accessibility for economically weaker sections and low-income groups.
 
·        Introducing a single-window clearance system for project approvals can expedite timelines and reduce carrying costs for developers. This will lead to faster project deliveries, benefiting both developers and end-users.
 
·        Allocating higher funds for urban infrastructure along with enhanced connectivity through metro rail and road networks will unlock the potential for both residential and commercial developments.
 
We urge the government to introduce progressive policies that not only boost housing demand but also create a sustainable and transparent ecosystem for all stakeholders in the real estate sector. These steps can transform India’s urban landscape while contributing significantly to the nation's GDP.

(8)
By Abhishek Jain, COO, Satellite Developers Private Limited (SDPL)
The Union Budget 2025-26 presents an excellent opportunity to catalyze growth in the real estate sector, which is a key contributor to India's economic progress and employment generation. We have high expectations from this year's budget, as the government continues to emphasize housing and infrastructure development.
 
Enhancing the tax deduction limit under Section 80C and Section 24(b) for home loan principal and interest repayment can significantly boost affordability and demand in the residential sector. This step is crucial to enable middle-class homebuyers to make their dream of owning a home a reality.
 
As urbanization accelerates, the need for affordable rental housing is more pronounced. The introduction of tax benefits for individuals and corporates investing in rental housing can support the government’s Rental Housing Scheme and promote organized housing options.
 
The announcement of funds for mega infrastructure projects such as metro expansions, high-speed rail corridors, and urban transport systems can enhance connectivity and unlock new real estate growth corridors. This will directly benefit peripheral and emerging micro-markets, attracting more investment.
 
To attract more institutional investments, we urge the government to introduce further tax benefits and incentives for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). This will provide a strong capital flow into commercial and infrastructure projects.
 
The real estate sector plays a pivotal role in achieving the vision of a $5 trillion economy, and we hope the Union Budget 2025-26 will reflect a balanced and forward-looking approach that addresses key challenges and accelerates sectoral growth.

(All views are personal)