The upcoming Union Budget 2025-26 holds immense promise for India’s real estate sector, offering an opportunity to address long-standing challenges and unlock new growth avenues. Industry leaders from prominent organizations have voiced their hopes for transformative measures that align with the government’s broader goals of economic growth and Housing for All.

From tax incentives for homebuyers and Real Estate Investment Trusts (REITs) to the long-anticipated ‘industry status’ for the real estate sector, stakeholders are calling for policy reforms to enhance affordability, streamline regulations, and promote sustainable practices.

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, says, “The forthcoming budget offers a significant opportunity to tackle the challenges associated with rising borrowing and construction expenses. Initiatives such as adjusting the affordable housing price threshold to reflect the escalating costs of urban development, raising the tax deduction limit for home loan interest, and implementing tax incentives for REITs could provide essential support to homebuyers and draw in new investors. Bestowing the long-desired ‘infrastructure’ designation upon the real estate sector can simplify regulatory frameworks, stimulate growth, and enhance access to affordable financing, thereby aligning with the government’s objective of achieving ‘Housing for All’.”

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Furthermore, optimizing Goods and Services Tax (GST) rates and promoting the adoption of green building practices will contribute to establishing a sustainable, technology-driven growth path. Through these transformative initiatives, Budget 2025-26 has the potential to establish a robust real estate sector that propels economic advancement.

Ankush Kaul, President – Sales, Marketing & CRM – Central Park, says, “The real estate industry is keenly awaiting the forthcoming Union Budget 2025, which is anticipated to introduce strategies aimed at rejuvenating the market and fostering sustainable growth. Essential measures, including a decrease in home loan interest rates and enhanced tax benefits on loan repayments, are expected to invigorate demand across various segments, particularly benefiting the luxury housing sector. Furthermore, specific incentives for upscale residential projects—such as expedited approval processes for large developments and encouragement for sustainable building practices and advanced infrastructure—are vital. Investments in infrastructure and urban development to broaden premium living areas will significantly improve the appeal and accessibility of luxury properties.”

The real estate sector experienced significant growth last year, fueled by increasing urbanization and heightened demand across various segments, including affordable, mid-income, and luxury housing.

“We anticipate that the forthcoming budget will emphasize tax relief for homebuyers and simplify regulatory frameworks. Furthermore, the introduction of tax incentives for investments in REITs that focus on premium commercial or residential properties would likely attract additional investments and enhance the sector’s vitality. We also expect the government to persist in its commitment to infrastructure development. These initiatives are essential for ensuring that the housing sector continues to play a pivotal role in driving economic advancement. The long-standing request for the real estate sector to be granted industry status remains a priority, and we are optimistic that this issue will be resolved this year,” says Aditya Kushwaha, CEO and Director of Axis Ecorp.

The realty industry is currently at a crucial crossroads, and the Budget 2025 must serve as a catalyst for making housing both accessible and sustainable for future development. It is anticipated that the government will implement strategies to unlock the sector’s full potential. A focus on fiscal incentives for affordable and mid-range housing is essential, which should include tax advantages for both developers and purchasers, as well as increased funding under the Pradhan Mantri Awas Yojana (PMAY). Such measures would not only sustain the sector’s existing momentum but also address the demand for high-quality housing.

Additionally, “lower interest rates would enhance the affordability of home loans, thereby encouraging more individuals to invest in property. Income tax relief would further contribute to this by increasing disposable income and promoting higher expenditure in the real estate market. Moreover, the development of infrastructure in Tier 2 and Tier 3 cities is vital for achieving balanced growth and alleviating the strain on metropolitan areas. Lastly, a reduction in excise duty on fuel would help lower construction expenses, which would help stabilize housing prices. It is hoped that the forthcoming budget will respond to these requirements, paving the way for a more sustainable trajectory for the sector’s advancement,” observes Mohit Goel, Managing Director, Omaxe Ltd.

Property prices and construction expenses have steadily risen over the years. In this context, raising the tax exemption limit to Rs 5 lakh would effectively address the changing requirements of homebuyers and the market.

“This adjustment would help ensure that housing remains both accessible and appealing to potential buyers, providing the necessary relief to make homeownership more attainable. Another crucial change we are eager to see is the implementation of the GST input tax credit. Currently, developers face a substantial tax burden, and a minor modification could alleviate this pressure. If developers experience reduced strain, it could lead to a greater availability of affordable housing options. These measures could significantly enhance housing accessibility for all,” observes Amrita Gupta, Director of Manglam Group.

Sandeep Chhillar, Founder and Chairman, Landmark Group, said, “Supported by strong performance and sustained growth, the real estate sector is at a crucial point in its growth trajectory. The sector is pinning high hopes at the upcoming budget announcements to look into its long-pending demands of industry status and single window clearance. The government must consider introducing policies and reforms, to further amplify foreign and domestic investment into the sector as it will further strengthen market sentiments. Additionally, we expect the government to consider a revision in taxation policies to offer greater benefits to first-time homebuyers as it could be a pivotal move fostering homeownership and driving broader economic growth.”

Uddhav Poddar, CMD, Bhumika Group, said, “The foremost expectation is raising the Section 80C deduction limit for home loan repayments. We’ve also been waiting for real estate to be recognised as an official industry – this could really unlock the sector’s full potential and help it grow even more. On the commercial side, we believe the sector could use more support, especially with the government’s push for entrepreneurship. Lowering interest rates and creating a smoother approval process would also go a long way in making the whole ecosystem stronger.”

Harinder Singh Hora, Founder Chairman, Reach Group, said, “As the upcoming budget is being shaped, there is increasing consideration to weigh the real estate sector as any other capital-intensive industries in terms of benefits and support. Additionally, a proposed increase in the current home loan deduction limit from ₹2 lakh to ₹5 lakh would further stimulate investment opportunities and open more avenues for investors. We remain optimistic that in this budget, the ITC claim on construction costs for commercial buildings used for leasing or renting should be allowed, which shall act as a significant move to boost investment in the commercial real sector.”

Piyush Kansal, Executive Director of Royale Estate Group, said, “2024 brought luxury real estate into the limelight as a key driver of the sector’s growth. As the momentum is expected to be sustained in 2025, we have huge expectations from the forthcoming budget. The introduction of a single-window clearance system for real estate approvals will significantly reduce project delays and enhance the ease of doing business. In addition, granting industry status to the real estate sector in this budget would be a transformative move. This will encourage more private investments and contribute to faster infrastructure growth.”

Harsh Gupta, CEO of Sundream Group, said, “The commercial real estate sector plays a vital role in supporting the government’s vision of fostering entrepreneurship and economic growth. To meet the rising demand, we urge the government to introduce policy interventions such as streamlined interest rates and a single-window clearance system for approvals in the upcoming budget. Additionally, targeted incentives and infrastructure support will further strengthen this segment, enabling it to thrive and contribute significantly to the nation’s economic development.”

Aman Gupta, Director, RPS Group, said, “We focus on catering to the affordable housing segment and the current market conditions in the country are making it impossible to do so. We have observed a surge of over 30-40% in the development costs in metropolitan cities over the past two years. This means that the pre existing benchmarks for housing are no longer viable, which need to addressed in the budget.”

Vikas Garg, Joint Managing Director, Ganga Realty, said, “With the upcoming budget, we anticipate policies that will bolster the real estate sector, including the growing luxury housing segment and its allied industries. Rationalizing GST, offering enhanced tax benefits for homebuyers, and incentivizing affordable and mid-segment housing can boost demand across all categories. The luxury housing market, driven by evolving buyer preferences, would benefit from targeted initiatives such as reduced stamp duties and easier financing options. Additionally, supporting allied sectors like building materials, interiors, and technology integration will create a ripple effect across the economy. We are optimistic the budget will address these aspects to accelerate the sector’s growth trajectory.”

Saransh Trehan, Managing Director, Trehan Group, said, “We are hopeful that the upcoming budget will introduce progressive measures to further strengthen the real estate sector, which is a key contributor to economic growth. Steps like reducing GST on under-construction properties, enhancing tax incentives for homebuyers, and increasing allocation for affordable housing schemes will stimulate demand and investment. Special focus on infrastructure development, streamlined approval processes, and support for green construction practices will benefit developers and buyers alike. Additionally, initiatives to promote rental housing and revive allied sectors like construction materials and interior design will ensure holistic growth. A balanced and growth-oriented budget can unlock the sector’s true potential.”

Anurag Goel, Director, Goel Ganga Developments, said, “The sector is also advocating for an increase in the tax deduction limit on the interest of home loans. If the tax deduction limit on home loan interest is increased from ₹2,00,000 to ₹5,00,000, it would be a welcome relief to home buyers especially in the medium income group. This will increase the demand for housing and the increased cost of borrowing may be offset.”

LC Mittal, Director, Motia Builders Group, said, “The industry status would help because developers would be able to secure finance at lower rates than the current level, which could bring house prices down by 8-10% per unit. This will be helpful in the case of affordable housing projects.”

Manoj Goyal, Director of Forteasia Realty Pvt. Ltd, said, “The workspace preferences have changed after the outbreak of the pandemic. There is an increasing market demand for hybrid workspaces and smart offices. The budget must provide special fiscal policies creating incentives for the construction of technology-driven commercial buildings and data-cum-storage centers within the country.”

Gurmit Singh Arora, National President of the Indian Plumbing Association, said, “The real estate sector wants the government to come up with strategies that will provide sustainable development. In the future, we expect to see increased tax reliefs for projects that include advanced water management systems installed with rainwater harvesting, water treatment plants, and complex plumbing systems. Large projects should mandatorily incorporate water reuse in landscape and non-potable applications through advanced water reclamation systems. There is a need for more focus on water and resource efficiency technologies as well as green building designs. Cutting GST slabs on green plumbing materials and water treatment equipment should encourage contractors to adopt water-saving measures.”

Gaurav Kansal, Director KBP Group, said, “The spurt in the establishment of GCCs has changed the dynamics of the office space market in the region. This requires us to implement a single-window clearance mechanism for all commercial projects. Eventually this would cut down the present timelines for approvals of about 18-24 months to about 6-8 months, which fast tracks the delivery of the projects as well as the responsiveness of the market.”

Mohit Sharma, Founder, Gainers Realtors LLP, said, “The potential that the commercial real estate market has is extraordinary, with rental yields going above and beyond other options of investment. We are seeing a rising demand from both the local community and international investors. The budget should be geared towards implementing policies and tax breaks for REITs so that there is greater institutional investment in Grade A office assets. The sector is optimistic that the forthcoming budget will tackle these issues while making the best out of the opportunities as well as the gains made in the sector recently.”