Budget 2026 Highlights REIT Push and Real Estate Growth Measures

The Union Budget has introduced a series of measures aimed at strengthening India’s real estate and construction ecosystem. Budget 2026 focuses on capital recycling, tax simplification, infrastructure development, and regional urban growth, signalling strong policy support for the sector.

With targeted reforms in asset monetisation, manufacturing, taxation, and urban planning, Budget 2026 is expected to accelerate real estate growth while improving investor confidence and project execution efficiency.

REIT Push to Unlock Public Real Estate Assets

One of the most significant announcements in Budget 2026 is the government’s plan to monetise central public sector enterprise (CPSE) real estate assets through Real Estate Investment Trusts (REITs). This move aims to unlock the value of mature public assets and channel capital into new infrastructure projects.

REITs have already proven their effectiveness in generating stable returns and improving transparency in commercial real estate. By expanding the use of REITs, Budget 2026 seeks to deepen capital markets and enhance liquidity in the property sector.

This approach is expected to benefit developers, investors, and government agencies alike by enabling efficient capital recycling.

Also Read: What Real Estate Stakeholders Expect from Budget 2026

Boost to Construction Equipment Manufacturing

Another major initiative under Budget 2026 is the proposed scheme to strengthen domestic manufacturing of advanced construction and infrastructure equipment. The scheme is designed to support the production of high-value machinery required for large-scale urban development.

The initiative covers a wide range of equipment, including elevators for high-rise buildings, fire safety systems, and tunnelling machinery for metro and road projects. By promoting domestic manufacturing, Budget 2026 aims to reduce dependence on imports and speed up project execution.

This could significantly improve productivity in the construction sector and enhance India’s infrastructure capabilities.

Tax Relief on Compulsory Land Acquisition

Taxation reforms form a crucial part of Budget 2026, with the government announcing income tax exemptions on compensation received from compulsory land acquisition under specific provisions of the law.

This measure is expected to reduce tax-related disputes and provide greater clarity to landowners affected by public infrastructure projects. By simplifying the tax framework, Budget 2026 seeks to create a more predictable environment for land acquisition and development.

The reform could also encourage smoother implementation of infrastructure projects across the country.

Simplified Compliance for Property Transactions

To ease regulatory compliance, Budget 2026 proposes changes in procedures for property transactions involving non-residents. Under the new framework, buyers will be allowed to report tax deductions using PAN instead of obtaining separate tax registration numbers.

This step aligns non-resident property transactions with domestic processes, reducing procedural complexity and compliance costs. By improving ease of doing business, Budget 2026 aims to attract greater investment into India’s real estate sector.

City Economic Regions and Tier II–III City Growth

Urban development is another key focus of Budget 2026, with the introduction of City Economic Regions (CERs). These regions will prioritise infrastructure development in Tier II and Tier III cities, as well as heritage and temple towns.

The government has proposed substantial financial allocations for CERs over the next five years, with funding linked to reforms and performance outcomes. Through this initiative, Budget 2026 seeks to promote balanced regional development and harness economic growth beyond major metropolitan cities.

Improved infrastructure in emerging urban centres is expected to drive housing demand and commercial activity.

Continued Push for Urban Infrastructure

In addition to CERs, Budget 2026 reiterates the government’s commitment to infrastructure development in large urban centres. Cities with populations exceeding five lakh are expected to receive sustained investment in transport, housing, and civic amenities.

This continued focus on urban infrastructure could strengthen real estate demand across multiple segments, including residential, commercial, and industrial property.

By integrating infrastructure planning with urban growth, Budget 2026 aims to create resilient and future-ready cities.

Also Read: Budget 2026: Homebuyers Seek Price Caps, Penalties for Project Delays

Policy Clarity and Industry Response

Industry experts have welcomed the reforms announced in Budget 2026, highlighting their potential to support long-term growth in the real estate sector. The emphasis on infrastructure-led urbanisation, regional integration, and regulatory clarity is expected to strengthen investor sentiment.

Policy stability and predictable regulations could encourage fresh investments and accelerate project development across the real estate value chain.

Long-Term Impact on Real Estate Sector

The measures introduced in Budget 2026 are likely to have a multi-dimensional impact on the real estate sector. From improved access to capital and simplified taxation to enhanced infrastructure and regional development, the budget provides a comprehensive roadmap for sustainable growth.

Over the medium to long term, these reforms could lead to increased housing supply, stronger commercial real estate performance, and greater participation from institutional investors.

Conclusion

By combining financial reforms, infrastructure investments, and urban development initiatives, Budget 2026 has laid the foundation for a more robust and transparent real estate sector.

As India continues its urban transformation, the policies introduced in Budget 2026 are expected to play a crucial role in shaping the future of real estate and construction.