By Mr. Kuldeep Jain, Founder & CEO, Build Capital
As the Union Budget 2025-26 approaches, the real estate and infrastructure sectors are looking forward to policies that can drive growth and address long-standing challenges. Here are some key expectations for the sector:
1. Tax Reforms for Homebuyers
Increasing the tax deduction limit under Section 24(b) for home loan interest (currently capped at ₹2 lakh) would provide significant relief to homebuyers, especially in metro cities where property prices are high.
2. Support for Affordable Housing Projects
Extending the benefits of Section 80-IBA for affordable housing projects until March 2029 would encourage developers to focus on affordable housing and help achieve the government’s vision of “Housing for All.”
3. Simplifying GST and Reducing Tax Rates
The current GST regime is complex and burdensome for developers. Simplifying and reducing GST rates would help reduce costs, streamline processes, and ease the financial burden on the sector.
4. Granting Industrial Status to Real Estate
The real estate sector has long sought industrial status, which would provide easier access to financing, lower borrowing costs, and boost investor confidence in the market.
5. Rationalising Stamp Duty
Stamp duty rates, which can reach as high as 8-9% in some states, remain a major financial burden for homebuyers. Rationalising these rates for properties up to ₹1.50 crore would make homeownership more affordable and stimulate demand.
6. Streamlined Project Approvals
A single-window clearance system for project approvals, especially for high-rise buildings and environmental clearances, would reduce delays and improve the ease of doing business in the sector.
7. Incentives for Sustainable Development
The government should offer incentives, such as tax benefits or subsidies, to developers who adopt green building practices. This would support the country’s commitment to achieving net-zero emissions.
8. Boosting Global Investment
Attracting more Foreign Direct Investment (FDI) into real estate—particularly in commercial and technology-driven segments—would strengthen the sector. Simplifying regulatory frameworks and offering tax incentives would position India as an attractive destination for international investors.
9. Funding for PropTech Innovation
Providing incentives or funding for PropTech (property technology) adoption would help make the real estate sector more efficient, transparent, and technology-driven.
10. Increased Investment in Infrastructure
Increased budget allocation for infrastructure development—especially metro networks and multimodal transport corridors—would support the growth of commercial real estate, particularly in urban and peripheral areas.
11. Support for REITs, InvITs, and Fractional Ownership
Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) have brought transparency and liquidity to the market. Reducing taxes on dividends and offering more incentives for retail investors could boost their adoption. Additionally, fractional ownership platforms are making high-value real estate more accessible, and the government should support their growth with favourable policies.
