Whalesbook
Budget 2026: Real Estate Sector Calls for Tax Reforms and Policy Clarity
The Indian real estate sector is pressing the government for significant policy interventions and tax relief in the upcoming Budget 2026. Industry leaders contend that rising land prices, escalating construction costs, and outdated tax structures are rendering many housing projects unviable, particularly in major urban centers.
Key Demands: Tax and GST Rationalization
Developers are advocating for an increase in the price bracket for affordable housing, which currently stands at ₹45 lakh. They argue this limit is out of sync with current market realities. Shiv Garg, Director at Forteasia Realty Pvt. Ltd., stated, "The existing limit... does not correspond to the land and construction costs in most development areas." He suggested raising the bracket to ₹80-90 lakh and reducing GST on works contracts from 18% to 12% to revive stalled projects and encourage new supply.
Stimulating Demand and Developer Credit
There is also a push for stronger incentives for first-time homebuyers, especially those purchasing mid-income homes who currently miss out on affordable housing benefits. Aman Gupta, Director at RPS Group, noted that extending benefits to this segment could improve homeownership prospects. Suggestions include raising the price limit to around ₹90 lakh, reinstating additional interest deduction under Section 80EEA, and easing credit access for developers.
Housing as Infrastructure
Industry leaders emphasize the need for housing to be recognized as core infrastructure, aligning with India's rapid urbanization. Anurag Goel, Director at Goel Ganga Developments, commented, "For a rapidly urbanising India, this Budget needs to regard housing as essential infrastructure rather than a treatable asset class." Policy fine-tuning is also sought to ensure adequate housing supply in Tier 1.5 and Tier 2 cities.
The sector additionally desires rationalization of GST on under-construction homes and expedited project approvals. Industry stakeholders believe that with enhanced clarity and stability, developers will be motivated to invest in greener, more livable housing projects, driving steady and sustainable growth in the housing market.