Budget 2026: Can It Make Housing More Affordable?
With Budget 2026 just around the corner, the real estate sector is brimming with anticipation. For many, buying or building a home has become a significant challenge. Rapidly rising land prices, inflation, and lengthy project approval processes have made the journey difficult for both homebuyers and developers. However, the government’s “Housing for All” mission offers a glimmer of hope.
Real estate experts emphasize that the most urgent priorities are providing tax relief and reforming home loan regulations. These measures are expected to make housing more affordable and help stabilize the property market.
One of the major demands in the upcoming budget is a reduction in GST rates on home construction projects. Currently, home projects attract an 18% GST, and there is a strong push to bring this down to 5% or 12%. A lower tax rate would significantly reduce construction costs, making homes more affordable for buyers and easing their financial burden.
The existing definition of affordable housing is based on outdated conditions. The current limit of Rs. 45 lakh and fixed size criteria no longer reflect present-day realities, especially in light of rising inflation and increasing land prices. There are growing expectations related to home loans. Currently, buyers can claim tax exemptions on interest payments up to Rs. 2 lakh. However, there is a strong demand to raise this limit to Rs. 5 lakh to provide greater relief to borrowers. Additionally, there are discussions about offering interest subsidies for first-time homebuyers to encourage home ownership and support the housing sector.
The government is expected to expand its incentives to encourage women to become homeowners or co-owners. If these schemes are strengthened in the upcoming budget, more people from all sections of society will be able to fulfill their dream of owning a permanent home.
However, developers are facing challenges beyond just tax-related issues. They are also requesting the government to raise the investment limits that qualify for capital gains tax exemptions. They believe that this would help investors save more and encourage greater participation in the real estate sector.
To streamline the approval and clearance process, a “one-stop shop” system is being proposed, where all required permissions can be obtained from a single office. The industry believes that if these changes are included in Budget 2026, the real estate sector will receive fresh momentum. This will help make home ownership more accessible and affordable for the general public.
