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With the Union Budget 2026 approaching, India’s real estate sector is urging the government to revisit tax structures and housing definitions to align them with current urban market realities. Developers cite rising land prices, higher construction costs, and outdated affordable housing limits as key challenges affecting project viability and housing supply in major cities.
Industry leaders believe Budget 2026 can revive housing demand and unlock stalled projects by aligning tax incentives with market conditions, supporting mid-income buyers, and simplifying GST structures.
Why Real Estate Budget 2026 Is Critical for Housing Demand
The real estate sector makes a significant contribution to employment and economic growth; however, escalating costs and regulatory rigidity have slowed residential supply. According to developers, the Real Estate Budget 2026 must balance affordability for buyers with feasibility for developers to ensure sustainable housing growth.
Without tax recalibration, many urban housing projects risk delays or cancellations, especially in metros where land acquisition and compliance costs are high.
Call to Redefine Affordable Housing Price Limits
A key demand ahead of the Real Estate Budget 2026 is revising the ₹45 lakh cap for affordable housing, which no longer reflects market realities in most cities.
Industry recommendations include:
- Raising the affordable housing limit to ₹80–90 lakh
- Extending the 1% GST benefit to revised price thresholds
- Reducing GST on works contracts to improve project viability
Developers say these measures could revive stalled projects and expand housing supply in urban areas.
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Focus on First-Time Buyers and Mid-Income Housing
Mid-income homebuyers form a significant share of end-user demand but are currently excluded from affordable housing benefits. Stakeholders believe the Real Estate Budget 2026 should introduce targeted incentives for this segment.
Suggested measures include:
- Revival of Section 80EEA interest deduction
- Higher tax-benefit thresholds for first-time buyers
- Steps to lower EMIs and improve credit access
Such reforms could significantly improve homeownership prospects in high-growth regions.
Should Housing Be Treated as Essential Infrastructure?
Another major expectation from the Real Estate Budget 2026 is to grant housing the status of essential infrastructure. With rapid urbanisation, housing is increasingly viewed as a necessity rather than a discretionary asset.
Infrastructure status could:
- Enable cheaper, long-term financing
- Attract institutional investment
- Support large-scale housing in Tier 1.5 and Tier 2 cities
GST Rationalisation and Faster Project Approvals
Developers are also seeking GST rationalisation for under-construction homes and faster approval processes. Delays in clearances increase project costs and discourage investment.
Industry leaders say policy stability under the Real Estate Budget 2026 would encourage the development of sustainable, transit-oriented housing projects.
Conclusion
The real estate sector sees the Real Estate Budget 2026 as a pivotal opportunity to address affordability, revive housing demand, and restore project viability. By revisiting tax limits, supporting mid-income buyers, and offering clearer policy signals, the government can enable steady and sustainable growth in India’s housing market.
Ans 1. The Real Estate Budget 2026 is seen as critical because it can influence housing affordability, project viability, and supply in major cities. Tax incentives, policy clarity, and regulatory reforms in the budget could revive stalled projects and support mid-income homebuyers.
Ans 2. Developers are requesting tax relief, revision of affordable housing price limits, GST rationalisation, faster project approvals, and incentives for first-time and mid-income buyers to improve project feasibility and encourage housing supply.
Ans 3. The current ₹45 lakh cap for affordable housing does not reflect rising land and construction costs in most cities. Industry leaders suggest increasing the limit to ₹80–90 lakh and extending GST benefits to these revised thresholds to make projects viable.
Ans 4. The Real Estate Budget 2026 could support this segment through targeted incentives such as revival of the Section 80EEA interest deduction, higher tax-benefit thresholds, lower EMIs, and improved access to housing finance.
Ans 5. Many industry experts argue that housing should have essential infrastructure status. Doing so would allow cheaper long-term financing, attract institutional investment, and facilitate large-scale housing projects in Tier 1.5 and Tier 2 cities.
Ans 6. Rationalising GST for under-construction properties would lower project costs and improve financial viability. It would also encourage investment, reduce delays, and support the development of sustainable housing projects across urban India.
Ans 7. By providing tax relief, policy clarity, and financial incentives, the budget could unlock stalled projects, restore investor confidence, and increase housing supply in major metropolitan and urban regions.
Ans 8. The goal is to balance affordability for buyers with feasibility for developers, ensuring sustainable housing growth, stimulating demand, and supporting the long-term expansion of India’s residential real estate market.