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Real Estate Sector Pushes for Tax Reforms in Union Budget 2026

By GeoSquare News Desk · Published 2026-01-19

Ahead of the Union Budget 2026, real estate stakeholders are pushing for tax reforms and increased government funding. The industry is particularly focused on expanding the Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund. These fiscal measures are deemed essential to keep housing demand alive, revive stalled projects, and align policy with current market realities.

The National Real Estate Development Council (NAREDCO) has stressed the need for more financial support to unlock real estate-led growth through schemes like the SWAMIH Fund. Industry stakeholders have also called for raising the home loan interest deduction limit from ₹2 lakh to ₹5 lakh. They believe that additional interest subsidies and a reduction in GST would greatly benefit affordable housing.

Launched in 2019 with an initial corpus of ₹25,000 crore, the SWAMIH Fund was set up to provide last-mile funding for stalled residential projects and safeguard homebuyers trapped in delayed developments. Since its launch, the fund has invested in over 130 stalled projects across India, reviving nearly one lakh housing units. NAREDCO president Parveen Jain has urged the government to grant infrastructure status to the real estate sector and extend/expand the SWAMIH Fund.

Tax policy reforms are another big expectation from the upcoming Budget, especially as affordability pressures mount in urban markets. Anita Basrur, Partner at Sudit K Parekh and Co. LLP, has called for reducing GST on housing projects, and increasing the home loan interest deduction limit from ₹2 lakh to ₹5 lakh. She also suggested enhancing capital gains reinvestment limits and streamlining approvals through a single-window clearance mechanism to boost the sector.

These measures are seen as crucial for realizing the government’s vision of 'Housing for All' by making homes more affordable and accessible to a broader segment of the population. The real estate sector is a significant contributor to the economy, and these reforms could have far-reaching positive impacts on employment, infrastructure development, and overall economic growth.