As India gears up for the Union Budget 2025-26, the real estate sector has high hopes for government reforms that could stimulate growth and enhance efficiency. Sharing his insights with ETNOW, Pradeep Aggarwal, Founder and Chairman of Signature Global (India) Ltd., highlighted several budget expectations that could reshape the real estate industry.
In this blog, we delve into the sector’s top demands, focusing on potential policy changes and their implications for developers, homebuyers, and the economy.
1. Increase in Tax Exemption Limit on Housing Loans
One of the most significant reforms the real estate sector is seeking is a revision in the tax exemption limit for housing loans.
Current Scenario:
- Rising property prices and construction costs have outpaced the existing tax exemption limits.
Proposed Change:
- Revising the tax exemption limit on housing loans to ₹5 lakh.
Impact:
- Offers substantial relief to homebuyers.
- Encourages more people to invest in housing, boosting demand and market activity.
2. Granting Industry Status to Real Estate
Real estate leaders have long advocated for recognizing the sector as an “industry.”
Why It’s Important:
- The sector influences over 200 ancillary industries, such as cement, steel, and construction materials.
- Plays a crucial role in job creation and skill development.
Expected Benefits:
- Easier access to institutional funding for developers.
- Increased investor confidence, fostering overall economic growth.
3. Adjustments to GST Input Tax Credit Regulations
The current GST framework imposes significant tax burdens on developers, which are often passed on to buyers.
Proposed Adjustment:
- Revise GST input tax credit regulations to alleviate the tax burden on developers.
Impact:
- Could lead to lower property prices.
- Makes housing more affordable for buyers, aligning with the government’s “Housing for All” vision.
4. Subsidy for Housing Loans
To incentivize homeownership, Aggarwal proposes subsidies for housing loans.
Proposed Policy:
- A subsidy of up to ₹5 lakh for housing loans under ₹1 crore.
- Expand the definition of affordable housing to include properties priced up to ₹1 crore.
Impact:
- Provides financial assistance to homebuyers in urban and semi-urban areas.
- Encourages housing development in high-demand locations, addressing the housing deficit.
5. Real Estate’s Role in ‘Viksit Bharat 2047’
The real estate sector is expected to play a pivotal role in India’s journey towards becoming a developed nation by 2047.
How Real Estate Contributes:
- Drives infrastructure growth and urbanization.
- Boosts economic activity through job creation and ancillary industry growth.
- Enhances living standards with sustainable and affordable housing solutions.
Conclusion
The Union Budget 2025-26 offers an opportunity for the government to address key challenges in the real estate sector and unlock its full potential. From tax reforms to subsidies and industry recognition, these proposed changes could have far-reaching impacts on developers, homebuyers, and the economy at large.
As we await the Finance Minister’s announcements, it’s clear that a supportive budget could catalyze growth in the real estate sector, aligning with India’s broader goals of economic development and housing for all.
Stay tuned to RealEstateIndia.in for the latest updates on Budget 2025 and its impact on real estate.