As India’s Union Budget 2025 approaches, real estate industry leaders are voicing their expectations, calling for measures to stimulate the sector, particularly affordable housing, and improve market conditions. Key demands include tax reliefs, enhanced funding, and the long-awaited recognition of real estate as an industry.
Niranjan Hiranandani, Chairman of NAREDCO, emphasized the need to make homeownership more affordable by raising the tax deduction limit on home loan interest payments from Rs 2 lakh to Rs 5 lakh. He also advocated for granting infrastructure status to the housing sector, which would reduce borrowing costs and improve access to financing. Hiranandani also proposed expanding rental housing initiatives and revising individual tax rates from 37% to 25% to boost market participation and disposable income.
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“To improve rental affordability, it is imperative to expand rental housing beyond industrial workers. We recommend deleting notional income from house property held as stock-in-trade to facilitate the creation of a sufficient rental housing stock, in alignment with the ‘Housing for All’ objective,” Hiranandani said.
Anuj Puri, Chairman of ANAROCK Group, also called for the revival of the Credit-Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY) to support first-time homebuyers. He proposed releasing centrally controlled land for affordable housing projects and increasing the Rs 45 lakh price cap for affordable homes in high-cost cities like Mumbai.
“For the real estate sector, key expectations include industry status recognition and a revival of the affordable housing segment. Once a promising sector, affordable housing—homes priced under INR 40 lakh—has struggled post-pandemic, with demand and supply shrinking significantly,” Puri said.
Anshuman Magazine, Chairman & CEO of CBRE India, highlighted the rising construction and borrowing costs. He suggested revising the affordable housing price cap, offering tax incentives for Real Estate Investment Trusts (REITs), and increasing tax deductions for home loan interest to attract new investors and provide relief to homebuyers. He also recommended rationalizing GST rates and incentivizing green building adoption.
“Rationalizing GST rates and incentivizing green building adoption will help build a sustainable, technology-led growth trajectory. With these transformative measures, Budget 2025-26 can lay the foundation for a resilient real estate sector, driving economic development,” Magazine added.
Ritesh Mehta, Senior Director at JLL India, stressed that granting industry status to real estate would enable developers to access cheaper loans and reduce construction costs, ultimately benefiting homebuyers.
“Recognizing real estate as an industry in the budget can significantly enhance the sector’s performance. With this status, developers can access cheaper loans and reduced borrowing rates, ultimately lowering construction costs. These savings can be passed on to homebuyers, making housing more affordable,” Mehta said.
With real estate contributing nearly 7% to India’s GDP, industry leaders believe these measures could strengthen the sector and drive overall economic growth. The focus on affordable housing and infrastructure development is expected to help the residential segment regain momentum in 2025.