NAREDCO Urges Industry Status for Real Estate and Hike in Home Loan Interest Deduction

Realtors’ apex body NAREDCO has urged the Centre to grant industry status to the real estate sector, hike the home loan interest deduction limit to ₹5 lakh, and revise the affordable housing definition in the upcoming Union Budget.

Ahead of the Union Budget, realtors’ apex body NAREDCO has urged the government to grant industry status to the real estate sector and increase the deduction limit on interest paid on home loans to ₹5 lakh from the current ₹2 lakh.

The demands were raised on Thursday, when the association also called for a revision in the definition of affordable housing, proposing that homes priced up to ₹75–80 lakh be included under the category instead of the existing ₹45 lakh cap.

Addressing a press conference, NAREDCO Chairman Niranjan Hiranandani said while the Centre has taken several steps to support the real estate sector, stronger measures are needed to boost the affordable housing segment.

“We need to ensure ‘Housing for All’. Housing should get equal importance like any other infrastructure sector,” Hiranandani said, adding that the government should utilise its own land parcels for developing affordable and mid-income housing projects.

NAREDCO President Parveen Jain reiterated the demand to raise the interest deduction limit on home loans for self-occupied properties to ₹5 lakh, stating that the current cap of ₹2 lakh has remained unchanged for years despite rising property prices and borrowing costs.

Jain also stressed the need to promote rental housing, noting that low rental yields of just 1–3 per cent make such projects financially unattractive for developers. He said the government could encourage rental housing by offering tax incentives and other supportive measures to developers.

Highlighting the long-pending demand for industry status, Jain said such a move would enable developers to access cheaper institutional finance for land acquisition and construction inputs, thereby reducing overall project costs.

Considering the sector’s contribution to GDP and employment generation, Jain said it was time for the government to accord industry status to real estate, which is projected to grow into a USD 1 trillion sector by 2030.

He further said redefining affordable housing to include homes priced up to ₹80 lakh would widen buyer eligibility and boost demand, as such homes attract a lower GST rate of one per cent.