Union Budget 2025: Real estate sector experts anticipate policy measures to address financing, taxation, and infra issues, which are crucial for the sector's recovery and long-term growth.
- Union Budget 2025: Real estate sector experts anticipate policy measures to address financing, taxation, and infra issues, which are crucial for the sector's recovery and long-term growth.
Union Budget 2025: Ahead of Finance Minister Nirmala Sitharaman's presentation of Budget 2025 on February 1, India's real estate industry holds several expectations that could drive growth and benefit homebuyers. The industry anticipates policy measures to address financing, taxation, and infra issues, which are crucial for the sector's recovery and long-term growth.
Real estate stakeholders seek increased budgetary allocation to infrastructure development, including metro, rail networks and multimodal corridors, which will catalyze commercial real estate growth in urban and peripheral areas.
Experts also hope for a reduction in GST on raw materials like cement and steel, which would lower construction costs and make it feasible for developers to complete projects at competitive prices. This could benefit end-users by potentially lowering home prices. Moreover, lowering GST on under-construction properties would make homes more affordable and boost sales.
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1.Boosting housing affordability
According to Prashant Sharma, President of NAREDCO Maharashtra, increasing budgetary allocations for affordable housing and expanding credit-linked subsidies is imperative to ensure the success of initiatives like Pradhan Mantri Awas Yojana (PMAY-U). "Introducing new subsidies and incentives for developers focusing on affordable housing will accelerate the mission of 'Housing for All.'," said Rohan Khatau, Director of CCI Projects Private Ltd.
2.Rationalization of GST
The current GST regime remains ambiguous and poses a significant challenge for developers. According to Kuldeep Jain, Founder & CEO of Build Capital, simplifying and streamlining GST rates is imperative to reduce complexities and alleviate the financial burden on developers. "A uniform GST rate with input tax credit for residential and commercial projects can significantly reduce costs and streamline taxation. Reducing GST rates for under-construction properties can also encourage buyers and increase project sales," said Prashant Sharma.
3.Support for REITs, InviTs and fractional ownership
Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) have brought transparency and liquidity into the sector. "Reducing the dividend distribution tax and offering further incentives for retail investors can enhance their adoption. Fractional ownership platforms democratise access to high-value real estate assets, and the government should encourage their growth through comprehensive and supportive policies," said Kuldeep Jain.
4.Rationalization of stamp duty
Stamp duty rates in certain states, currently as high as 8-9 per cent, are a major financial burden for homebuyers in India. According to Kuldeep Jain, rationalizing these rates across states for homes up to ₹1.50 crore is crucial to making property ownership more affordable and driving housing demand.
5.Focus on rental housing
Rental housing can play a pivotal role in addressing urban housing shortages and supporting workforce mobility. The government should introduce incentives and policy support for developing affordable rental housing complexes, ensuring tenants have access to quality housing," said Prashant Sharma. With urbanization on the rise, rental housing schemes will create a more structured rental market. "This move will cater to a diverse population, including millennials and migrating professionals," said Rohan Khatau.
6.Industry status for real estate sector
Granting industry status to the real estate sector will open avenues for lower borrowing costs and improved access to institutional credit. "This will strengthen developers' ability to deliver quality projects on time," said Khatau. "It will also enable easier access to institutional funding at lower interest rates, particularly for mid-segment and affordable housing projects," said Sharma.
7.Tax Reforms for homebuyers
Real estate stakeholders also urge the government to revisit the tax deduction limits under Section 80C and 24(b) of the Income Tax Act. "An upward revision of the deduction limit for home loan principal repayment and interest on housing loans will significantly improve housing affordability and encourage homeownership, particularly in Tier II and Tier III cities," said Vikas Sutaria, Founder of Iraah Lifespaces. Experts say this step is crucial to enable middle-class homebuyers to realise their dream of owning a home.
8.Focused Benefits for NRI Investors
Considering the growing interest of NRIs in Indian real estate, specific measures such as streamlined repatriation processes, reduced tax burdens on property transactions, and enhanced ease of investing in residential and commercial properties could significantly boost NRI investments. "The real estate sector has always been pivotal in driving India's GDP growth and generating employment. We are optimistic that the budget will address these expectations and create a conducive ecosystem for developers, homebuyers, and investors alike," said Shraddha Kedia-Agarwal, Director of Transcon Developers.
9.Single-window clearance mechanism
According to Shraddha Kedia, a simplified and time-bound clearance system will enhance ease-of-doing business, enabling developers to complete projects on time and reduce costs. "A single-window clearance mechanism for approvals, reduced compliance burdens, and clear land title policies will streamline project execution and attract domestic and foreign investments," said Prashant Sharma.
10.Global investment boost
Policies that attract foreign direct investment (FDI) into real estate, especially in commercial and tech-driven investment segments, can further strengthen the sector. "Simplifying regulatory frameworks and providing tax incentives for global investors will help position India as an attractive destination for further international capital," said Kuldeep Jain.