CREDAI's Budget 2026 Wishlist: National Rental Housing Mission and More
Ahead of Budget 2026, the Confederation of Real Estate Developers’ Associations of India (CREDAI) has presented a comprehensive wishlist to the government. The association has urged the launch of a National Rental Housing Mission, revision of affordable housing definitions, and an increase in home loan interest deductions. These proposals aim to address the growing housing needs and economic challenges in the real estate sector.
In its Budget wishlist, CREDAI has proposed the establishment of a National Rental Housing Mission. This mission would focus on developing large-scale affordable rental stock in tier-1 and tier-2 cities. The initiative aims to formalize the rental market, curb informal settlements, support workforce mobility, and create a sustainable investment class without significant budgetary outlay. CREDAI suggests providing fiscal incentives for developers, tax relief for tenants, and encouraging institutional participation to achieve these goals.
The current affordable housing definition, which has remained unchanged since 2017, restricts units to 60 sq. m. in metros and 90 sq. m. in non-metros, with a ₹45 lakh value cap. CREDAI argues that these norms no longer align with the escalated land and construction costs. The association proposes revising the carpet area norms to 90 sq. m. in metros and 120 sq. m. in non-metros, removing the value threshold entirely, and harmonizing definitions with the harmonized list of infrastructure sub-sectors. This area-based approach is expected to expand viable supply in urban centers, simplify compliance, and support greater employment and economic activity.
The existing ₹2 lakh cap on housing loan interest deduction has remained unchanged for over a decade. This cap no longer reflects today’s higher property prices, loan sizes, and interest rates. In most urban markets, the annual interest outgo for middle-income homebuyers exceeds ₹4–6 lakh, significantly diluting the benefit. CREDAI recommends removing the cap for the first self-occupied residential property and extending the deduction to the new tax regime to ensure parity. Appropriate safeguards, such as limiting the benefit to owner-occupied and first homes, can prevent misuse. This reform is expected to improve affordability, enhance disposable income, stimulate housing demand, and align fiscal incentives with the objective of promoting home ownership.
CREDAI has also proposed setting up a dedicated Credit Guarantee Scheme, modeled on CGTMSE, covering affordable housing loans (up to 80–90% of property value) and home improvement loans. Given the low NPA profile of housing loans, this mechanism will de-risk lenders, expand credit outreach to EWS/LIG segments, and promote financial inclusion with negligible fiscal exposure. The proposed scheme is designed to be self-sustaining, with costs recovered through a nominal guaranteed fee from borrowers, thus entailing no upfront fiscal burden on the government budget.
Housing remains a critical engine of economic growth, employment generation, and urban transformation. To keep pace with India’s rapid urbanization, it is vital to strengthen affordability, expand access to formal finance, and develop a robust rental housing ecosystem. Targeted measures such as these will unlock investment, reinforce homebuyer confidence, improve financial inclusion, and enable sustained housing supply, according to Shekhar Patel, president of CREDAI.
