The Indian real estate sector, a significant contributor to the economy, faces several challenges, including liquidity constraints, regulatory bottlenecks, and fluctuating market demand. As the Union Budget 2025 approaches, industry experts remain hopeful that policy measures will foster growth, streamline processes, and strengthen long-term stability.
Affordable housing remains a priority, with expectations of increased tax incentives and subsidies for both developers and homebuyers.
Manju Yagnik, Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO-Maharashtra, highlighted the sector’s immense potential, citing an 11% increase in Mumbai’s housing sales in 2024. "We expect Budget 2025 to introduce tax reforms for middle-income homebuyers, stabilize raw material prices, and revise tax regulations for developers. These initiatives will support sustainable housing growth and boost the economy."
Dhiren Tharwani, Director at Tharwani Realty, emphasized easing regulatory barriers and improving infrastructure to accelerate affordable housing development in micro-markets.
Experts believe simplifying tax regulations and increasing home loan interest tax exemptions can fuel real estate investments. Dharmendra Raichura, VP & Head of Finance at Ashar Group, expects the exemption cap to rise from Rs 2 lakh to Rs 5 lakh, easing the financial burden on homebuyers.
Revisiting the affordable housing definition by increasing the Rs 45 lakh cap to reflect urban market trends is a key expectation. Vishal Jumani, Joint-Managing Director at Supreme Universal, stated, "Further tax reductions, GST adjustments, and improved access to housing finance can maintain upward momentum in the industry. Tax incentives for green initiatives can also encourage sustainable development."
As sustainability gains importance, industry leaders advocate for green building incentives. Pavan Kumar, Founder & CEO of White Lotus Group, emphasized the need for policies that promote eco-friendly construction, single-window approvals, and GST rationalization to enhance efficiency and demand.
The commercial sector, still recovering from pandemic-induced shifts, requires government intervention to attract investments and ease project approvals. Ashish Bhutani, CEO of Bhutani Infra, suggested, "Introducing single-window clearance for commercial real estate and facilitating foreign investments in mixed-use spaces can boost the sector and job creation.
Budget 2025 is poised to be a game-changer for the real estate sector. Experts anticipate policy measures that will drive affordable housing, streamline taxation, encourage green developments, and revitalize commercial real estate. These reforms will not only support industry growth but also contribute to India's economic ambitions of becoming a USD 5 trillion economy.
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