Budget 2026: Real Estate Sector Awaits Real Reform, Targeted Relaxations For Boost

Noida, January 29, 2026: Ahead of the Union Budget, the real estate sector is once again looking to the government for policy priorities. Amid rising construction costs, high interest rates, stalled projects, complex insolvency and strict regulatory processes over the past few years, the sector hopes the Budget will stimulate demand while addressing the challenges faced by developers in terms of funding and project delivery. Issues such as affordable and mid-income housing, tax incentives on home loans, easier credit access, and single-window approvals are considered key priorities on this year’s budget agenda.

According to industry experts, the growth of the real estate sector is directly linked to interest rates, tax structures and infrastructure investment. While the recent reduction in the repo rate has raised hopes of cheaper loans, the existing limit of INR 2 lakh under Section 24(b) of the Income Tax Act on home loan interest and the current cap under Section 80C offer limited relief to homebuyers.

Furthermore, pending dues to development authorities in several states, capital locked up in stalled projects, high taxes on construction materials, and a multi-layered approval system are impacting both project costs and timelines. The industry believes that if the budget grants industry status to real estate, provides single-window clearances, offers input tax credit, and outlines a clear policy for affordable housing, it will boost investment, employment and housing demand.

With just days to go, here’s what the top guns of real estate want, and are saying out loud.

Parveen Jain, CMD of Tulip Infratech and President, NAREDCO has a wishlist that includes:

• Increase in home loan interest tax deduction for end users from INR 2 lakh to INR 5 lakh, unchanged now for over 12 years
• Extension of capital gains tax relief to buyers purchasing more than two homes after selling a property
• Revision in the INR 45 lakh cap on affordable housing, especially for Tier-I cities like Delhi NCR and Mumbai, where home prices are significantly higher
• Introduce differentiated norms for Tier-II and III cities, considering unit sizes between 30–90 sq m

According to NAREDCO, these measures will boost homebuyer sentiment, improve housing affordability, and support sustained growth of India’s real estate sector.

Sanjay Sharma, Director, SKA Group has said that the real estate sector is looking at the Union Budget 2026 for “meaningful reforms that enhance housing affordability. Rationalisation of stamp duty and simplification of tax structures can reduce the financial burden on homebuyers and support faster decision-making. Combined with continued incentives on home loans, these steps can strengthen end-user demand and ensure sustainable growth across the housing sector.”

Amit Modi, Director, County Group: “The real estate sector is a major contributor to the country’s GDP. As a strong pillar of the Indian economy, the sector expects the government to address its long-standing demands in the upcoming budget. We anticipate that Budget 2026 will be less about subsidies and more about capital efficiency and policy certainty. Over the past two years, we’ve seen sustained demand in the INR 2 crore-plus segment, driven by end-users and HNIs viewing homes as long-term capital assets rather than discretionary purchases. What the sector now expects is clarity around long-term taxation, particularly rationalisation of capital gains timelines and indexation benefits, which directly influence holding behaviour in premium assets. Luxury buyers are not price-sensitive in the traditional sense, but they are highly sensitive to regulatory ambiguity. A stable tax framework allows developers to plan larger, low-density, high-design projects with longer gestation cycles. Budget 2026 has the opportunity to reinforce India’s luxury housing market as a credible, institution-friendly asset class, comparable to global residential investment destinations.”

Yash Miglani, Managing Director, Migsun Group: “Over the last few years, housing has proven its resilience, but keeping this momentum going will depend on how well policy keeps pace with market realities. From Budget 2026, we are looking for practical steps that genuinely improve homebuyer affordability, especially through higher tax deductions and more realistic income thresholds that reflect today’s housing prices. Supportive interest-rate signals will also be important in maintaining buyer confidence. On the supply side, single-window clearances remain critical, as approval delays continue to affect timelines and delivery certainty. Continued investment in infrastructure is equally important to open up new housing micro-markets within NCR and beyond, and support planned urban growth.”

Ansal Housing, Director, Kushagr Ansal: “If capital expenditure on urban infrastructure and transport networks is increased in Budget 2026, it will help sustain real estate demand over the long term. Markets such as NCR, Mumbai, and Bengaluru will benefit directly. Improved roads, enhanced metro connectivity, and multimodal transport systems give developers the confidence to launch projects in new areas while also expanding home-buying options for consumers.”

Bhupindra Singh, COO, RISE Infraventures: “Budget 2026 needs to acknowledge how sharply buyer behaviour has evolved over the last few years. Ticket sizes, loan tenures and holding periods have all expanded, yet tax frameworks remain largely unchanged. Revisiting income thresholds, home loan deductions and capital gains taxation is critical to restoring affordability and rebuilding buyer confidence. The sector is also looking forward to a higher deduction for housing loans under Section 80C, a step that would go a long way in improving viability, especially in urban mid-segments. A major push to the affordable housing segment is equally important, as there continues to be a significant unmet demand. A calibrated approach to interest rates can further support demand without creating speculative excesses. What we are seeing on the ground is clear—buyers are value-conscious, long-term oriented and far more financially planned than before. Policy alignment with these realities can meaningfully improve purchasing power, unlock fence-sitters and bring stability to residential transactions.

“The real estate sector eagerly anticipates policies that bolster long-term capital formation and reinforce housing’s pivotal role in economic growth. For developers like us in the luxury and branded residential segments, consistent taxation, expanded institutional financing, and streamlined regulations are vital to sustaining investor confidence and end-user demand. Continued investment in urban infrastructure, mass mobility, and integrated city planning is essential, as superior connectivity and robust civic amenities greatly enhance the appeal of premium developments. Measures that promote formalization, reduce compliance burdens, and maintain market balance will further drive the sector’s maturity. A well-calibrated, growth-focused Budget can empower real estate to contribute more significantly to employment, capital inflows, and India’s urban future,” said Anil Mittal, Chief Financial Officer, Smartworld Developers.”

Navdeep Sardana, Founder of Whiteland Corporation, describes the current phase as one “where luxury housing is no longer chasing volume but stability. For ultra-high-net-worth buyers, the INR 10-crore cap on capital gains reinvestment under Sections 54 and 54F has become a sticking point.” Revisiting that limit, he believes, would help “smoothen transactions in the upper end of the market”.
Sardana also expects the budget to support ESG-aligned developments and technology-led housing through green financing avenues. Access to capital, he says, should become simpler and less restrictive, allowing developers to spend more time on execution and less on managing cash flow. For NRI buyers, unresolved issues around TDS on property transactions continue to dampen sentiment.

Rajit Mehta, MD and CEO, Antara Senior Care: “We welcome the government’s continued focus on strengthening financial security for senior citizens, including the tax reforms supporting retirement savings and long-term financial planning. These measures are important as India goes through a demographic transition. The upcoming Budget can play a significant role in strengthening India’s senior care ecosystem through focused policy interventions. One of the most important Budgetary announcements that would significantly improve access would be expanding insurance coverage to include long-term care delivered through care homes and at-home services; strengthening reverse mortgage norms to allow up to 80 per cent of property value across city tiers. Second would be granting the sector infrastructure status to improve access to affordable, long-term financing, encouraging quality capacity creation across cities. Another important Budgetary announcement would be exempting senior care services from GST or taxing them on par with healthcare, recognising their importance in helping seniors age healthily. Further, establishing a dedicated nodal agency would help bring policy coherence across states and departments. These steps would go a long way to ensure that India’s growing senior population and their caregivers can access dignified, affordable and quality care.”

Shriram PM Monga, Co-Founder, SRED Real Estate Advisory: “As India’s retail market moves towards a $2-trillion opportunity, Budget 2026–27 has a critical role in strengthening consumption and modern retail infrastructure. Measures such as wider adoption of the Model Shops Act, priority status for food and beverage retail, easier credit for MSMEs and rationalised taxes can significantly improve ease of doing business. A supportive policy framework will help organised and traditional retail grow together, deepen employment and reinforce domestic demand.”

Aman Sharma, Founder and Managing Director, Aarize Group: “The NCR area remains the backbone of North India’s real estate sector, majorly contributing to residential and commercial development. From the 2026 budget, we are expecting policy interventions to fix infrastructure bottlenecks, streamline approval processes, and expedite environmental clearances. Measures such as stamp duty reductions, easier access to home loans, and incentives for first-time buyers can reassure end-users and increase demand. Focus on infrastructure, connectivity and livability, and further allocations will further aid buyer confidence and support long-term growth. We anticipate the government will recognise NCR’s potential and provide support for sustainable growth.”

Ankit Kansal, Founder & MD of Axon Developers: “Budget 2026 comes at a time when housing demand is expanding beyond primary residences into second homes, particularly in Tier II and III cities, where lifestyle-led living and remote work are reshaping buyer preferences. We expect the government to strengthen affordability by revisiting tax deductions and income limits that no longer reflect current price realities. Supportive interest-rate signals and continued infrastructure development will be critical to sustaining this momentum in emerging markets. Faster approvals through a single-window clearance system can also improve supply efficiency and delivery confidence.”

Ashwinder R Singh, Chair, CII Real Estate; Vice Chair, BCD Group; Advisor, NAR-India: “The Budget can accelerate India’s housing cycle by improving affordability and reducing friction. Key expectations include a higher home-loan interest deduction, continued incentives for affordable housing, and faster approvals through digitisation and single-window timelines. A stable, predictable policy framework will be the biggest confidence signal for both consumers and investors.”

Varun Kashyap and Sridevi Reddy, Co-Founders, Zithara.AI: “To have the government be more all-in and to be more invested both in letter, money and spirit, for that matter, as far as the ecosystem is concerned. The Government set aside a budget for INR 10,300+ crore to boost the India AI mission over 5 years might not be sufficient for scaling up the AI powered ecosystem. We need to treat AI as a future technology and treat it like Infrastructure to ensure better accessibility to funding.

“We would also like to highlight that if the government is more invested in the business then the ecosystem will be primed to support the startups. If a startup gets the 1st set of funding from the government and they need to scale up, going back to the government is not an option. The startup has to depend on VC’s. Therefore, we would like the Government to set up funds to facilitate the funding for scaling up particularly for the startups with a proven track record for performance.

“AI startups we can allocate only 10 to 15 percent budget allocated for AI R&D, which is not sufficient to scaleup. Moreover, currently we use the GPUs that are not in India we’re always living on borrowed technology and have to pay substantial amount for the same. With the high velocity of AI startups in the country, we need to build that capability inside India – a budget allocation for the same will be a great trigger for future growth. If the government is backing an initiative it is going to be the nation’s competitive advantage.

“The Centre must fully commit to AI startups in Budget 2026 with enhanced funding and security measures to power India’s deep-tech ecosystem.”

Manoj Tulsian, CEO & Joint Managing Director, Greenply Industries Ltd.: “The upcoming Union Budget is expected to strengthen India’s industrial ecosystem, given the increasing unpredictability of global commerce and the way tariffs are changing supply chains.

“For the wood panel and furniture industry, the Union Budget must continue incentives for affordable housing, increased tax exemptions on home loan interest payments, and policies that enhance liquidity for real estate developers. In addition, we look forward to a strong push for ‘Make in India’ furniture and interior products, that promote domestic sourcing and value addition. This will help drive capacity additions and make Indian wood panel manufacturers more sustainable and less dependent on imports.”