Union
Budget 2025-26 - Real Estate's Direct and Indirect Benefits..!
Anuj
Puri, Chairman - ANAROCK Group
The
Union Budget focused on economic expansion, infrastructure development, MSMEs,
futuristic cities, and middle-class welfare and brings substantial relief for
the middle class. It also aims to stimulate rural consumption - an essential
step toward unlocking India’s economic potential.
From a
real estate perspective, the budget delivers both direct and indirect benefits,
acting as a catalyst for growth. However, a notable shortfall was the absence
of major announcements for the affordable housing sector, leaving stakeholders
disappointed.
Despite
this, the budget overall remains strong and growth-oriented, with a clear focus
on economic development and enhanced consumption. Key takeaways for the real
estate sector include:
Key Announcements Impacting Real Estate
- Income Tax Relief for the
Middle Class - The Finance Minister announced zero income tax
for individuals earning up to INR 12 lakh annually, providing a major
consumption boost. This move is also expected to strengthen demand for
affordable housing. Additionally, the new income tax bill will retain
nearly 50% of existing provisions while introducing personal tax reforms
and rationalizing TDS and TCS regimes by streamlining rates and
thresholds.
- Tax Benefits for Residential
Property Investors - Investors can now claim Nil valuation for two
self-occupied properties, instead of just one - a positive move for
residential real estate investment. The simplified TDS on rent decreases
the compliance burden and enhances liquidity for landlords and will
positively impact the rental housing market, especially in metro cities.
Previously, homeowners could claim only one self-occupied property as
tax-free; now, they can claim two - thereby removing taxation on notional
rental income from a second home. This step minimizes tax pressures,
promotes homeownership, and facilitates real estate investment, especially
in second homes and Tier 2 and 3 cities. Middle-class homebuyers,
landlords, and investors can now benefit from reduced tax liabilities,
better affordability, and less compliance hassles. By simplifying
financial constraints and tax rules, the budget has made property
ownership and rental housing more accessible. This gives a significant
fillip to the real estate sector, specifically to and housing demand.
- INR 1 Lakh Crore Urban
Challenge Fund for New-Age Cities - The establishment of this
massive urban development fund will enhance infrastructure, unlock real
estate potential, and transform cities into major growth hubs.
- SWAMIH Fund Allocation of
INR 15,000 Crore - This initiative will facilitate the completion
of over 1 lakh stalled residential units, providing much-needed relief to
homebuyers, especially in the National Capital Region (NCR).
- Revamped UDAAN Scheme to
Improve Connectivity - The restructured UDAAN
scheme aims to connect 120 new destinations and serve over 4 crore
passengers in the next decade. Greenfield airports in Bihar and other
regions will be developed to support this expansion. This enhanced
connectivity is expected to boost real estate demand in Tier-II and
Tier-III cities.
- PM Gati Shakti Data Access
for Private Sector & Tourism & Warehousing Infrastructure Boost - The
government will open PM Gati Shakti data to private players, while 50 top
tourist destinations will be developed in collaboration with state
governments. Additionally, hotels will be included in the harmonized
scheme for tourism infrastructure, leading to enhanced real estate
opportunities in major tourist hubs. This will also benefit the
warehousing sector across the country.
- Support for Global
Capability Centres (GCCs) - A national guidance
framework will be introduced to help states attract and promote GCCs,
strengthening India’s position as a global business hub. Given India’s
rising economic influence, this move is expected to fuel office space
demand in major metros like Bengaluru, Mumbai, Hyderabad, Pune, and Chennai,
as well as Tier-II and Tier-III cities.
- INR 1.5 Lakh Crore Fiscal
Support for MSMEs - The allocation of INR 1.5 lakh crore to MSMEs
is expected to spur capacity expansion, creating a ripple effect that will
positively impact industrial real estate.
While the
affordable housing sector saw fewer direct benefits, the budget is, overall,
pro-growth, infrastructure-driven, and investment-oriented. The focus on
middle-class relief, urban development, and connectivity is expected to
stimulate real estate demand across various segments, making it an overall
progressive and impactful budget.
