The Impressive TimesKolkata, January10, 2025: With the Union Budget 2025-26 approaching, India’s real estate sector is eagerly anticipating reforms that could drive growth, enhance affordability for homebuyers, and stabilize financial conditions for developers. Contributing approximately 8% to the nation’s GDP, the real estate sector plays a vital role in generating employment and fostering infrastructure development, making it a cornerstone of India’s economic strategy for the future.
In 2024, the sector saw impressive growth, with residential housing sales reaching record highs, despite challenges like inflation and rising interest rates. However, experts and developers argue that maintaining this upward trajectory will require crucial policy interventions, including tax relief, better access to funding, and more efficient approval processes. These steps are essential to addressing ongoing hurdles that still affect the industry.
“As we approach the Union Budget 2025-26, there is optimism that it will bring in much-needed reforms that can revolutionize the real estate sector. Strategic fiscal measures to boost demand, alleviate liquidity constraints, and simplify regulations are essential for rejuvenating the market and ensuring its long-term viability,” said an industry leader. “By addressing the evolving needs of the sector, we can restore confidence among buyers while fostering technological innovations. Embracing advancements like blockchain for secure and transparent transactions, AI-powered market insights, and eco-friendly building solutions could unlock significant growth potential. With the right policy support, Indian real estate has the opportunity to become a global leader while ensuring sustainability,” he elaborated.
One of the primary demands from the sector is an increase in the tax deduction limit on home loan interest under Section 24(b) of the Income Tax Act, from Rs 2 lakh to Rs 5 lakh. Developers believe this change will be particularly beneficial in metro cities, where property prices continue to climb, and will encourage greater demand from homebuyers. Additionally, industry leaders are advocating for the revival of the Credit Linked Subsidy Scheme (CLSS), which would support first-time homebuyers and ease liquidity challenges faced by developers and financial institutions.
Another key area of focus for the sector is the need for a more streamlined and faster approval process for real estate projects. Lengthy approval timelines have often delayed construction and increased costs for developers, and industry players are hopeful that reforms in this area could lead to quicker project completions and reduced project expenses. Furthermore, tax exemptions and reduced duties on raw materials such as cement and steel would help developers reduce the overall cost of construction, making homes more affordable.
The real estate sector also hopes to see stronger incentives for the adoption of green building technologies and energy-efficient solutions. With environmental sustainability becoming a growing concern, many developers are pushing for tax breaks and subsidies for the construction of eco-friendly buildings that meet sustainability standards.
The real estate sector is an integral part of India’s economic growth and, with the right policy reforms, it holds immense potential to fuel both economic development and job creation. As the Union Budget 2025-26 draws nearer, all eyes are on the government to deliver reforms that will not only address the sector’s current challenges but also pave the way for a more dynamic, affordable, and sustainable real estate market in India.
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