NAREDCO's Budget 2026 Wishlist: Push for Higher Affordable Housing Cap and Rental Incentives
Ahead of Budget 2026, the National Real Estate Development Council (NAREDCO) has submitted its wishlist to the government, emphasizing the need for significant changes in the affordable housing segment and rental housing policies. On January 22, NAREDCO recommended that the government revise the definition of affordable housing, suggesting that homes priced up to ₹75-80 lakh be classified as affordable, instead of the current cap of ₹45 lakh. This move aims to make housing more accessible to a broader segment of the population.
The association also called on the government to promote rental housing by offering appropriate incentives to real estate developers. Rental yields in the housing segment currently remain low, ranging from 1-3%, making rental projects commercially unviable for developers. NAREDCO believes that tax incentives and supportive policy measures could help encourage realtors to invest in and scale up rental housing.
NAREDCO chairman Niranjan Hiranandani, speaking at an event in the Capital, highlighted that while the government has undertaken various measures to support the real estate sector, more needs to be done for the affordable housing segment. He suggested that the government should utilize its own land for the development of affordable and mid-income housing. Hiranandani emphasized the importance of ensuring 'Housing For All,' stating that housing should be given equal importance as any other infrastructure sector.
NAREDCO president Parveen Jain echoed these sentiments, adding that the limit for deduction of interest on home loans should be increased to ₹5 lakh for self-occupied properties, up from the current ₹2 lakh. Jain further stated that homes priced up to ₹80 lakh should be considered as affordable housing. This change in definition would benefit homebuyers, as the Goods and Services Tax (GST) on affordable homes is just 1%.
Incentives for rental housing are also a key focus area for NAREDCO. Jain urged the government to actively promote rental housing by offering appropriate incentives to real estate developers. He noted that the low rental yields make it difficult for developers to invest in rental projects, and suggested that tax incentives and supportive policy measures could help make these projects more viable.
Another significant ask from NAREDCO is the granting of industry status to the real estate sector. Jain highlighted that the association has long been demanding this status, which would enable access to cheaper financing for key inputs, including land and construction materials. Considering the sector's substantial contribution to India's GDP and employment creation, Jain believes it is high time the government provides industry status to the real estate sector, which is estimated to reach $1 trillion by 2030.
These recommendations from NAREDCO reflect the industry's efforts to address the challenges in the real estate sector and ensure sustainable growth. By revising the affordable housing cap, promoting rental housing, and granting industry status, the government can significantly enhance the accessibility and affordability of housing for a larger segment of the population.
