As the Union Budget 2025-2026 (FY26) inches closer, the Indian real estate industry is seeking stamp duty cuts, revised home loan limits and updated affordable housing norms through Pradhan Mantri Awas Yojna (PMAY), single-window clearance and eco-friendly policies, among others.
Industry leaders and consultancy firms, including Anarock, Raheja, Gaurs, Kanodia Group, Reach, Urban Space, Justo and Eros Group, have shared their expectations.
Manoj Gaur, president CREDAI-NCR and chairman & managing director, Gaurs Group, said, “One of the major demands of the sector is rationalisation of stamp duty, which has increased significantly in recent years and is causing a big financial burden on buyers.
"Further, a revision of the current deduction limit from Rs 1.5 lakh to Rs 5 lakh under Section 80(c) should also be considered to ease home ownership experience.”
Gaur advocates revising affordable housing criteria by replacing the Rs 45 lakh price cap with a focus on carpet area — 60 square metres in metros and 90 square metres in non-metros.
He also urges reintroducing the 100 per cent tax holiday for projects approved before March 31, 2022, to boost affordable housing and advance the 'Housing for All' mission.
“The commercial real estate sector, aligned with the government’s push for entrepreneurship, also requires policy-level support to sustain its momentum.
"Rationalising interest rates to fuel demand and introducing a single-window clearance system to expedite approvals would further strengthen the real estate ecosystem,” said Mohit Kalia, vice-president (sales), Raheja Developers.
Delhi-NCR's Kanodia Group urges tax relief and goods and services tax (GST) reduction on construction materials, aiming to lower project costs and empower developers to initiate new ventures more efficiently.
“We firmly believe that this year’s Budget has the potential to strengthen the real estate industry, enabling it to play an even more substantial role in shaping the nation’s economic landscape,” said the group’s founder Gautam Kanodia.
Harinder Singh Hora, founder and chairman of Reach Group, too, suggested increasing the home loan deduction limit to Rs 5 lakh from Rs 2 lakh.
This is to boost investment opportunities and attract more investors.
Anuj Puri, chairman of Anarock Group, suggests that the Union Budget should reintroduce the credit-linked subsidy scheme (CLSS) under PMAY for economically-weaker section (EWS) households, which had expired in 2022.
This would incentivise first-time buyers of affordable homes, extending subsidies to loans for new constructions or essential additions to existing properties.
Under PMAY (rural), subsidies could also help convert ‘kaccha’ homes into ‘pucca’ ones, given the eligibility criteria.
Additionally, industry players also believe that the definition of affordable housing needs updating, especially in high-cost cities like Mumbai, with price caps raised accordingly.
“According to Anarock data, the sales share of affordable housing fell to a mere 18 per cent in 2024 from over 38 per cent in 2019.
"This stark decline highlights the urgent need for intervention. Affordable housing requires focused attention and targeted benefits, which have been lacking in the past two years,” Puri added.
The year 2024 has seen a slowdown in real estate due to general and state elections, with housing sales in the top seven cities declining by 4 per cent.
It was around 446,000 units and new launches dropped by 7 per cent to around 413,000 units.
However, with appropriate boosters for affordable housing, 2025 could bring a revival, helping the residential segment regain its 2023 highs in sales and launches, believes Puri.
“Institutional funding in real estate, which hit a record $6.5 billion in 2024, reflects strong investor confidence, but expanding liquidity measures will ensure timely project delivery.
"As we transition into 2025, policies enabling rental housing expansion and infrastructure growth will be pivotal in driving urbanisation,” said Avneesh Sood, director, Eros Group.
Pushpamitra Das, founder & director of real estate fintech firm Justo, advocates for GST rationalisation on under-construction residential and commercial properties, tax benefits for REITs to boost participation, and SEZ benefit extensions.
“India’s real estate sector plays a crucial role in driving economic growth, contributing significantly to GDP and employment,” Das says.
Home decor brand Urban Space co-founder Radhika Koolwal, said, “The home decor industry is optimistic about measures that can bolster growth and innovation.
"We hope for policies that incentivise domestic manufacturing, such as subsidies on raw materials and machinery, along with tax breaks for MSMEs and startups.
"A reduction in GST rates on home furnishings and decor items would be a significant step toward making quality products more accessible to the growing middle class.
"Additionally, we expect initiatives that encourage sustainable practices.”
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