Whalesbook
Budget 2026: Real Estate Sector Outlines Key Demands
Ahead of the upcoming Union Budget, real estate industry stakeholders are advocating for substantial fiscal interventions and policy recalibrations. The primary objective is to reignite housing demand, address the critical issue of stalled projects, and ensure policy frameworks effectively mirror current market conditions. Industry leaders have stressed that targeted government support is paramount for sustained growth.
SWAMIH Fund Expansion Crucial for Stalled Projects
The Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund, launched in 2019 with an initial corpus of ₹25,000 crore, has been instrumental in providing last-mile financing to delayed residential developments. Government disclosures indicate SWAMIH Fund-I has supported over 130 projects, potentially reviving nearly one lakh housing units, with tens of thousands already delivered. Industry bodies, led by the National Real Estate Development Council (NAREDCO), are urging for a significant expansion of this fund to unlock further real estate-led economic expansion.
Tax Reforms and Affordability
Tax policy reforms are another cornerstone of the sector's budget expectations, particularly in light of escalating affordability pressures in urban centers. Stakeholders propose increasing the home loan interest deduction limit from ₹2 lakh to ₹5 lakh and advocate for additional interest subsidies and a reduction in Goods and Services Tax (GST) on housing. These measures are seen as vital for bolstering affordable housing initiatives and aligning with the "Housing for All" agenda. Current affordable housing caps and size limits are also deemed outdated due to rising inflation, land prices, and construction costs, necessitating an urgent recalibration.
Infrastructure Status and Credit Access
Beyond financial incentives, the sector is calling for the real estate industry to be accorded infrastructure status. This would significantly improve access to institutional financing for developers, thereby bolstering investor confidence. Streamlining project approvals through a single-window clearance mechanism and enhancing capital gains reinvestment limits are also on the agenda. Furthermore, sustained investment in urban infrastructure, public transportation, and integrated city planning is deemed critical to enhancing the appeal of residential developments, especially in tier 2 and tier 3 cities.
Investor Confidence and FDI
Developers are seeking policy consistency and improved access to institutional capital to maintain positive investor sentiment. The broader economic environment, including buoyancy in equity markets and foreign capital inflows, is recognized as crucial for sustaining housing momentum. Encouraging more Foreign Direct Investment (FDI) into the real estate sector is also a key expectation for the upcoming budget.