Finance Minister Nirmala Sitharaman’s Union Budget 2025-26 has been met with optimism from the real estate sector, with industry leaders praising its focus on infrastructure, tax relief, and liquidity measures while urging more emphasis on affordable housing.
A major highlight of the budget is the increase in the income tax exemption limit to ₹12 lakh, boosting disposable income and encouraging homeownership. The removal of tax on two self-occupied properties is expected to drive fresh investments in residential real estate. “This progressive reform provides significant tax relief and acknowledges the evolving housing needs of Indian families,” said Domnic Romell, President, CREDAI-MCHI.
The increase in the TDS exemption threshold on rental income from ₹2.4 lakh to ₹6 lakh will further support landlords and small taxpayers. Amit Jain, CMD, Arkade Developers, remarked, “These measures will spur housing demand, particularly in metro and Tier-1 & 2 cities.”
The ₹15,000 crore infusion into the Special Window for Affordable and Mid-Income Housing (SWAMIH) Investment Fund 2.0 has been widely appreciated for addressing stalled housing projects and providing relief to homebuyers. “With the completion of 50,000 units under the existing SWAMIH scheme and another 40,000 in the pipeline, this move ensures liquidity and accelerates housing deliveries,” noted Ashwin N Sheth, CMD, Sheth Group.
The budget allocates ₹1 lakh crore under the Urban Challenge Fund to address land and development constraints, fostering robust infrastructure in key urban corridors. The continued capital expenditure of ₹11.21 lakh crore on railways, roads, and logistics is expected to boost economic activity. “A stronger infrastructure framework will transform India into a competitive logistics hub, reducing costs and enhancing efficiency,” said Dr. Niranjan Hiranandani, Chairman, NAREDCO.
The push for Global Capability Centers (GCCs) in Tier-II cities is another welcome move. “Expanding GCC footprints beyond metros will unlock real estate potential and drive regional economic growth,” added Badal Yagnik, CEO, Colliers India.
Despite the positive measures, experts expressed concerns over the lack of specific sops for affordable housing. “A national rental housing policy and higher tax deductions for home loans would have further strengthened the sector,” said Piyush Bothra, Co-Founder & CFO, Square Yards.
Shrinivas Rao, CEO, Vestian, echoed similar sentiments, highlighting the importance of fiscal incentives for affordable housing to ensure inclusive economic growth.
The real estate sector, which employs over 71 million workers, faces a critical skill gap, with 81% of the workforce unskilled. “By 2030, the sector will need 33 million skilled workers. Bridging this gap through policy interventions is essential for sustainable industry growth,” emphasized Dr. Hiranandani.
Overall, the budget has been lauded for its pro-investment stance and long-term growth initiatives. “The continued focus on infrastructure, taxation relief, and economic expansion makes this a well-rounded, growth-oriented blueprint,” concluded Shishir Baijal, CMD, Knight Frank India.
