Union Budget 2026-27: REIT Monetization and Infrastructure Spending Boost Real Estate
By: Mr. Amit Chopra, President- NAR India
The Union Budget 2026-27 introduces several measures that are highly relevant to the real estate sector, particularly focusing on asset monetization, infrastructure spending, and transaction ease. These initiatives are expected to bring positive momentum to the industry, addressing key areas that have long been in need of attention.
The proposal to use Real Estate Investment Trusts (REITs) for monetizing Central Public Sector Enterprise (CPSE) assets is a significant step. This move is expected to unlock substantial value from underutilized government land and attract institutional capital to the real estate market. REITs have been instrumental in providing liquidity and transparency, making it easier for investors to participate in the real estate sector without the need for direct ownership of physical assets.
Continued capital expenditure on infrastructure and urban connectivity is another crucial aspect of the budget. These investments are likely to support demand in Tier-2 and Tier-3 markets, which have been growing steadily in recent years. Improved infrastructure can lead to better connectivity, making these markets more attractive for residential and commercial developments. This can also help in reducing the pressure on Tier-1 cities, which are often overburdened with population and traffic.
The removal of the TAN (Tax Deduction and Collection Account Number) requirement for Non-Resident Indian (NRI) property sales is a welcome move. This simplifies the compliance process for NRIs, making it easier for them to sell their properties without the hassle of obtaining a TAN. This can potentially increase the number of transactions involving NRI properties, thereby boosting the real estate market.
Tourism-focused initiatives are also expected to benefit hospitality-led real estate. With the government's focus on promoting tourism, there is likely to be an increase in demand for hotels, resorts, and other hospitality-related properties. This can create new opportunities for developers and investors in the hospitality sector.
However, some expectations remain unaddressed in the budget. Higher home loan interest deductions, a revised definition of affordable housing, and industry status for real estate are areas that may require further policy attention. These measures could have a significant impact on the affordability and accessibility of housing, particularly for middle-income and lower-income groups.
In conclusion, the Union Budget 2026-27 has introduced several positive measures that are likely to boost the real estate sector. While some areas still need further attention, the overall direction is promising. The focus on asset monetization, infrastructure spending, and transaction ease is expected to create a more vibrant and dynamic real estate market in the coming years.
NAR India, the National Association of Realtors in India, is a leading organization that represents real estate professionals across the country. It plays a crucial role in advocating for policies that benefit the real estate industry and its stakeholders. For more information, visit their official website.
