The Union Budget 2025-26, set to be presented on February 1, has become a topic of intense discussion across industries, particularly in the real estate sector. Developers are vocal about their expectations, proposing measures aimed at fostering growth, boosting homebuyer confidence, and addressing urban housing challenges.
At the heart of these proposals lies the government’s ‘Housing for All’ vision for 2030, with the real estate sector anticipating policy reforms and financial incentives to accelerate progress toward this goal.
Affordable Housing in Focus
A major focus is the affordable housing segment. Dr. Nayan Shah, Chairman and Managing Director of Mayfair Housing, has suggested raising the price cap for affordable housing projects to ₹75 lakh to better support this critical segment and reduce the financial burden on homebuyers. He also advocates for including real estate under Input Tax Credit (ITC) and phasing out stamp duty under a proposed ‘One Nation, One Tax’ initiative.
Jash Panchamia of Suraksha Smart City echoes these sentiments, emphasizing the need to revise the price cap from ₹45 lakh to ₹75 lakh for the Mumbai Metropolitan Region (MMR). He believes this adjustment, along with extended benefits under Section 80-IBA, will reflect market realities and enhance housing accessibility.
Increased Allocation to PMAY
Bhavesh Shah, Joint Managing Director of Today Group, which has projects in Navi Mumbai and Thane, supports an increase in the budget allocation to the Pradhan Mantri Awas Yojana (PMAY). “A 10-15% rise over the previous ₹79,000 crore allocation would help ensure that efforts to provide housing for all gain momentum,” he said. Shah also highlighted the need for policies promoting urban regeneration and incentives for vertical developments to transform India’s urban landscape.
Addressing Rising Costs of Homeownership
Rising costs remain a concern for both developers and homebuyers. Parthh K Mehta, CMD of Paradigm Realty, emphasized the importance of increasing the tax deduction cap on home loan interest, which would provide instant relief to homebuyers and encourage investment in residential real estate. Similarly, Chintan Sheth, CMD of Sheth Realty, called for additional tax benefits for first-time homebuyers and a more rationalized property tax structure to spur demand.
Sustainability and Green Housing Initiatives
Green housing and sustainability have also emerged as key priorities. Dr. Shah proposed leveraging a labor cess to improve construction workers’ welfare and promote green-certified buildings. Hiren Chheda, Managing Director of Ekatva Group, stressed the importance of special provisions for green-certified buildings to attract foreign investors and address environmental challenges.
Streamlining Costs and Processes
With a projected 34% increase in high-rise towers exceeding 40 floors by 2030 in Mumbai, developers like Mehta advocate for reduced input costs on materials such as steel and cement, along with a streamlined single-window clearance system to eliminate delays and encourage investments.
Improving Urban Infrastructure
Developers are also pushing for improvements in urban infrastructure. Chintan Sheth urged the government to allocate additional funds for city infrastructure to ensure the viability of affordable housing projects. Hiren Chheda suggested simplifying REIT regulations to enhance liquidity for developers while boosting retail investor participation.
The Call for Industry Status
Anmoll D Shroff, Founder and CEO of Graanth Realty, highlighted the need to grant the real estate sector industry status, unlocking access to institutional capital and low-cost financing options. Shroff also proposed reducing GST on essential construction materials and rationalizing rates for under-construction properties to optimize costs. Additionally, he advocated for tax incentives for real estate derivatives like REITs and SMREITs to increase retail investor participation.
A Balanced Budget is Key
While the sector praises the government’s efforts to improve urban housing and infrastructure, developers believe the 2025-26 Budget offers an opportunity to address longstanding concerns. Tax reforms, improved regulatory frameworks, and increased infrastructure investments could collectively drive growth and make real estate more inclusive and accessible.
The industry is optimistic that the upcoming budget will balance the aspirations of all stakeholders, fostering a more robust and sustainable ecosystem for developers, homebuyers, and investors alike.
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