Union Budget 2025: Real Estate Sector Seeks Reforms to Boost Housing Demand
In 2024, the real estate sector witnessed significant growth, particularly in Mumbai, where housing sales increased by 11%. Real estate players are hoping that the Union Budget 2025 will introduce more reforms to further enhance housing demand and afforda
Union Budget 2025Real EstateHousing DemandTax ReformsInfrastructureReal Estate MumbaiJan 11, 2025
They are calling for improved housing finance availability and further tax reforms, including a reduction in GST, to make housing more accessible.
Additionally, there is a growing expectation that the government will focus on the commercial real estate segment.
“Raising the interest amount limit for home loans under tax exemption from the current Rs 2 lakh to at least Rs 5 lakh would significantly benefit middle-income homebuyers.
This move would not only increase the number of people looking to buy houses but also reduce the cost of owning a home, especially given the annual urban housing price inflation of about 6-8%,” said Harshvardhan Tibrewala, Managing Director of Vida Realty.
The real estate industry also looks forward to the government allocating at least Rs 10 lakh crore for infrastructure development, part of the envisaged Rs 100 lakh crore investment plan over five years.
This investment will enhance connectivity and create new growth corridors across the country.
According to a joint report by EY and CREDAI, the Indian real estate sector is poised for substantial growth, projected to exceed $4.8 trillion by 2047, contributing 18% to the projected $26 trillion GDP.
In 2024, Mumbai alone saw a remarkable 11% increase in housing sales.
“We expect the budget 2025 to implement measures that will further strengthen the real estate industry.
Increasing tax slabs, particularly for individuals earning Rs 12-15 lakh annually, will enable more citizens to invest in home ownership.
Revising tax regulations for developers and stabilizing raw material prices will help manage construction costs and maintain housing affordability.
These initiatives will not only boost the real estate sector but also support India’s broader economic and housing goals, fostering sustainable growth nationwide,” stated Manju Yagnik, Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO-Maharashtra.
Faster project clearance and smoother sanctioning processes are also high on the industry's wishlist.
“Introducing single-window clearance systems to fast-track project approvals is a crucial step that can save time and reduce delays for commercial real estate projects.
Simplifying the process for foreign investors to invest in mixed-use and Grade-A office spaces, along with tax incentives for green buildings and smart urban projects, can attract global investors and elevate the region’s status as a commercial hub.
With strategic government support, the real estate sector can significantly boost job creation and contribute to India’s $5 trillion economy vision,” emphasized Ashish Bhutani, CEO of Bhutani Infra.
Frequently Asked Questions
What reforms are real estate players expecting from the Union Budget 2025?
Real estate players are expecting reforms such as improved housing finance availability, further tax reforms, including a reduction in GST, and increased infrastructure development.
Why is the interest amount limit for home loans under tax exemption important?
Raising the interest amount limit for home loans under tax exemption from Rs 2 lakh to Rs 5 lakh would benefit middle-income homebuyers, making homeownership more affordable and increasing the number of people looking to buy houses.
How much infrastructure development funding is expected in the Union Budget 2025?
Real estate stakeholders are hoping for at least Rs 10 lakh crore to be allocated for infrastructure development, as part of the envisaged Rs 100 lakh crore investment plan over five years.
What is projected for the Indian real estate sector by 2047?
According to a joint report by EY and CREDAI, the Indian real estate sector is projected to exceed $4.8 trillion by 2047, contributing 18% to the projected $26 trillion GDP.
What measures can help fast-track commercial real estate projects?
Introducing single-window clearance systems and simplifying the process for foreign investors to invest in mixed-use and Grade-A office spaces can help fast-track commercial real estate projects, reducing delays and attracting global investors.
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