Dr. Niranjan Hiranandani, Chairman of the National Real Estate Development Council (NAREDCO), has submitted a series of recommendations to the Finance Ministry for the FY 2025-26 Union Budget. Highlighting key challenges faced by the real estate sector, the proposals aim to boost affordable housing, improve urban infrastructure, and ensure sustainable growth.
Dr. Hiranandani emphasized the need for targeted measures to address pressing challenges in the housing and infrastructure domains, outlining several key proposals:
1. Increased Funding for Affordable Housing
NAREDCO urged the government to allocate additional funds to the affordable housing segment, which is currently experiencing negative growth. Enhanced funding would stimulate inclusivity and sustainable urban development.
2. Higher Home Loan Tax Deductions
The organization proposed raising the tax deduction limit on home loan interest payments from ₹2 lakh to ₹5 lakh, aiming to make homeownership more affordable and boost market demand.
3. Infrastructure Status for Housing
Granting infrastructure status to the housing sector was identified as a critical step. According to NAREDCO, this move would unlock new investment avenues and position housing as a key pillar of national infrastructure.
4. Urban Infrastructure Development
NAREDCO stressed the importance of improving energy and transportation infrastructure to complement housing development, ensuring sustainable urban growth and enhanced quality of life.
5. Rental Housing Expansion
To address rental affordability, the council recommended removing notional income from house properties held as stock-in-trade, facilitating the creation of a robust rental housing stock in line with the government’s “Housing for All” mission.
6. Incentives for Rental Housing Investment
The council proposed deleting provisions that discourage rental housing investment by restricting loss set-offs from house property income.
7. Safe Harbour Adjustments for Ready Reckoner Rates
NAREDCO suggested increasing the safe harbour for differences between Ready Reckoner rates and market values from 10% to 25% to better align with market realities.
8. Rationalized Tax Rates and Capital Gains Reforms
Recommendations included reducing individual tax rate slabs from 37% to 25% to boost disposable income, lowering dividend taxation for resident investors to 10%, and reforming capital gains tax rules to encourage the purchase of multiple homes.
9. Slum Redevelopment Incentives
The council proposed targeted initiatives to accelerate slum redevelopment, particularly in cities like Mumbai, with a vision of eliminating urban slums within five years.
Dr. Hiranandani underscored the transformative potential of these measures, stating that their implementation would drive housing demand, enhance affordability, and contribute to the nation’s economic growth. NAREDCO has called on the government to prioritize these recommendations in the upcoming budget to ensure the long-term stability and prosperity of the real estate sector.
