What the Real Estate Sector Hopes to See in Budget 2025
The Indian real estate sector stands as a cornerstone of the nation's economy, significantly contributing to employment and GDP. As the Union Budget 2025 approaches, stakeholders are optimistic about reforms and incentives that could stimulate growth, address prevailing challenges, and foster a conducive investment climate.
In this blog, we delve into the key expectations from the upcoming budget, focusing on taxation, affordable housing, infrastructure development, sustainability, and financial policies poised to influence the future of India's real estate industry.
1. Tax Reforms and Incentives
Tax reliefs and incentives are pivotal in alleviating financial pressures on developers and homebuyers.
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Enhancement of Home Loan Interest Deduction: Industry experts advocate for an increase in the tax deduction limit on home loan interest under Section 24(b) from the current ₹2 lakh to ₹5 lakh. This adjustment would make homeownership more accessible and invigorate housing demand.
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Separate Deduction for Principal Repayment: Introducing a distinct annual deduction of ₹1.5 lakh for home loan principal repayments under Section 80C could further incentivize homebuyers.
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GST Rationalization: A uniform and reduced Goods and Services Tax (GST) rate on under-construction properties is anticipated to lower acquisition costs, thereby benefiting buyers and stimulating market activity.
2. Affordable Housing Initiatives
Affordable housing remains a critical focus, with expectations for policies that bridge the affordability gap.
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Revision of PMAY Thresholds: Adjusting the house value cap under the Pradhan Mantri Awas Yojana (PMAY) from ₹35 lakh to ₹50 lakh in metropolitan areas would align the scheme with urban market realities, extending its benefits to a broader population.
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Interest Subsidies for First-Time Homebuyers: Implementing special interest rate subsidies for first-time buyers in the affordable segment could promote homeownership among lower and middle-income groups.
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Land Acquisition Reforms: Streamlining land acquisition processes and offering incentives for affordable housing projects can encourage private sector participation and expedite project completion.
3. Infrastructure Development and Smart Cities
Infrastructure advancements are integral to real estate growth, with the budget expected to prioritize urban development projects.
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Expansion of the Smart Cities Mission: Allocating additional funds and incorporating more cities into the Smart Cities initiative can drive comprehensive urban development, enhancing the quality of life and real estate prospects.
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Public Transport and Connectivity: Investments in metro rail, highways, and other connectivity projects are anticipated to boost real estate values in suburban and emerging areas by improving accessibility.
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Development of Peripheral Regions: Encouraging real estate development in Tier 2 and Tier 3 cities through incentives can alleviate congestion in metros and promote balanced regional growth.
4. Sustainability and Green Real Estate
With increasing environmental concerns, the sector expects incentives for sustainable building practices.
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Tax Benefits for Green Buildings: Offering tax rebates for developers and buyers of green-certified projects can promote eco-friendly construction methods.
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Subsidies for Renewable Energy Integration: Financial assistance for integrating solar panels, rainwater harvesting, and energy-efficient systems in buildings will support sustainable development.
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Mandatory Green Certifications: Implementing compulsory sustainability certifications for large projects can steer the industry towards environmentally responsible practices.
5. Financial Reforms and Liquidity Enhancement
Ensuring financial stability is crucial, with stakeholders seeking measures to improve liquidity and investment.
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Single-Window Clearance System: Establishing a streamlined approval process can reduce project delays, lowering costs and fostering timely project delivery.
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Incentives for Real Estate Investment Trusts (REITs): Providing tax benefits and enhancing the attractiveness of REITs can channel more investments into commercial real estate, bolstering the sector.
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Easier Access to Credit: Revising lending norms for developers and creating special funds for stalled projects can rejuvenate growth and restore investor confidence
6. Promotion of Rental Housing and Co-Living Spaces
Given urbanization trends, there's a push for policies supporting rental housing and co-living arrangements.
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Implementation of Rental Housing Policies: A well-defined rental housing policy with tax incentives for landlords and investors can strengthen the rental market, catering to the needs of a mobile workforce.
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Support for Co-Living and Student Housing: Providing financial incentives and regulatory clarity for co-living spaces can meet the growing demand among young professionals and students, fostering community living.
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Easier Access to Credit: Revising lending norms for developers and creating special funds for stalled projects can rejuvenate growth and restore investor confidence
Conclusion:
The real estate sector is a cornerstone of India's economic growth, and the upcoming Budget 2025 presents an opportunity to introduce reforms that can drive long-term progress. From tax benefits and affordable housing to sustainability and infrastructure development, the industry’s expectations are centred around creating a more investor-friendly and homebuyer-centric ecosystem.
If the government addresses these key areas in Budget 2025, it could pave the way for a more resilient, transparent, and thriving real estate market in India. Industry stakeholders and homebuyers alike are eagerly waiting for announcements that will shape the future of real estate in the coming years.
At Preeti Developers, we are committed to delivering high-quality real estate solutions that align with the evolving needs of homebuyers and investors. With a focus on excellence, innovation, and customer satisfaction, we have established ourselves as a trusted name in the industry. Whether you are looking for premium residential spaces or lucrative investment opportunities, Preeti Developers offers the best-in-class properties tailored to meet your aspirations.