Budget 2025: Real estate experts react to tax cuts, unmet affordable housing expectations

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The Budget 2025 has elicited a spectrum of responses from real estate experts, reflecting both commendations for certain initiatives and concerns over unmet expectations.

Dr Niranjan Hiranandani, Chairman, NAREDCO & Hiranandani Group, said, that from the vantage point of the real estate and infrastructure sectors, the Budget 2025 sets the stage for transformative growth.

"Central to this budget is its unwavering focus on infrastructure enhancements. Notably, it incentivizes the purchase of a second flat, encouraging real estate investments. Moreover, the introduction of SWAMIH Fund 2.0 seeks to alleviate the burden on constrained homebuyers by delivering stalled projects, while the hike in TDS on rentals up to Rs 6 lakh promises to bolster rental investments. By expediting mergers and acquisitions, the budget aims to initiate new real estate projects under innovative business models. Additionally, addressing the skill gap through the establishment of new centres of excellence will help bridge the widening talent chasm. However, the concern over inadequate long-term investment allocation remains a hindrance to achieving the ambitious Viksit Bharat growth targets," he said.

"The middle class, a crucial driver of demand, stands to benefit immensely from tax incentives that translate their aspirations for an improved quality of life into tangible home-buying prospects. This is expected to generate a positive demand curve in the real estate sector. Banks have reported a notable 40% increase in retail home loan portfolios post-COVID, and the anticipated reduction in home loan interest rates will further fuel this sustained demand. Emerging growth corridors featuring new projects with integrated amenities are poised to attract even more buyers," Hiranandani added.

He said that the budget also shines a spotlight on labour-intensive sectors to ensure that quality, productivity, and competitiveness are enhanced, positioning India as a formidable global player. "A strategic highlight is the finance minister's announcement of a Rs 1 lakh crore Urban Challenge Fund. This fund aims to address land and development obstacles, foster robust social infrastructure in key urban centres, and drive infrastructure development across urban corridors. The focus on new airports, shipping ports, and inland waterways is set to transform India into a competitive logistics hub, reducing product costs and boosting economic efficiency," Hiranandani added.

Hiranandani further said that it is worth noting that the budget has not taken significant action towards uplifting affordable housing, a segment crucial for inclusive growth and economic stability.

"In summary, the Budget FY26 is a forward-thinking document that lays a comprehensive foundation for growth, though certain areas like long-term investment and affordable housing require further attention to fully realise the vision of a prosperous and developed Bharat," he added.

Anuj Puri, Chairman - ANAROCK Group, said that the Union Budget focused on economic expansion, infrastructure development, MSMEs, futuristic cities, and middle-class welfare and brought substantial relief for the middle class. "It also aims to stimulate rural consumption - an essential step toward unlocking India's economic potential," he added.

"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," Puri said.

The ANAROCK Group chairman further said that 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," he added.

Manju Yagnik, Vice chairperson of Nahar Group and Senior Vice President of NAREDCO Maharashtra, said, "The Budget 2025 reaffirms the government's commitment to inclusive development, economic growth, and a strategic focus on increasing consumption. For FY26, FM Sitharaman has allocated Rs 11.21 lakh crore, reaffirming the government's focus on infrastructure development and economic growth. The allocation of Rs 1.5 lakh crore in interest-free loans for capital expenditure and the push for PPP-driven infrastructure projects will enhance urban connectivity and boost development. The launch of SWAMIH Fund 2 with Rs 15,000 crore is a welcome move to revive stalled housing projects, ensuring timely completion and restoring homebuyer confidence. The continued emphasis on affordable and mid-income housing will further drive demand, supporting homeownership aspirations. Additionally, personal income tax reforms and a higher TDS threshold for senior citizens will improve disposable income, positively influencing housing affordability. With a fiscal deficit target of 4.8 per cent for FY25, the budget balances growth and financial prudence. These measures collectively strengthen the foundation for a dynamic and resilient real estate market."

Sunny Bijlani, Joint Managing Director - Supreme Universal, said Budget 2025, Finance Minister Nirmala Sitharaman announced a significant change regarding self-occupied properties. "Taxpayers are now allowed to claim the annual value of two self-occupied properties as nil, effectively exempting them from paying tax on notional rental income for both properties. Previously, only one self-occupied property could be claimed as tax-exempt, while additional properties were subject to tax based on deemed rental income, even if they were not rented out, he added.

He said that the real estate sector is set for significant growth, driven by the government's unwavering commitment to infrastructure development. "With 50,000 dwelling units already completed under the SWAMI scheme and another 40,000 in progress, housing demand is rising. The Rs 15,000 crore SWAMI Fund 2 will provide essential financial support to stalled projects, ensuring timely completion and strengthening market stability," he added.

He further said that increased investments in urban mobility, utilities, and connectivity will enhance residential and commercial developments, making cities more liveable and business friendly. "These strategic reforms and higher infrastructure spending will unlock new investment opportunities, propelling long-term growth and reinforcing India's vision for sustainable urban expansion," Bijlani said.

"While Budget 2025 introduces measures that could indirectly boost the real estate sector by enhancing consumer spending, industry experts stress the need for more targeted reforms. Key demands include addressing affordable housing, granting industry status, implementing tax reforms, and investing in infrastructure - steps they believe are crucial for driving sectoral growth and strengthening its contribution to the economy."

Ecohing similar sentiments, Dhiren Tharwani, Director - Tharwani Realty, said that the government's commitment to develop urban infrastructure through the Rs 1 lakh crore Urban Challenge Fund, and capex-linked loans of Rs 1.5 lakh crore for FY26, this budget offers a promising opportunity to the real estate sector.

"We welcome these initiatives that will spur much-needed growth in city redevelopments and enhancement of existing infrastructure. The emphasis on urban renewal is a move in the right direction toward making cities more smart and sustainable and we look forward to joining this transformative journey with innovative, future-ready developments," he added.

Ashish Bhutani, CEO - Bhutani Infra, said that the Budget 2025 reinforces India's commitment to urban transformation and infrastructure​ growth.

"The Rs 1 lakh crore Urban Challenge Fund and Rs 1.5 lakh crore interest-free loans for​ capex will unlock new opportunities for real estate and city development like Noida. The​ push for PPP projects and the upcoming Investment Friendly Index for states signal a more​ structured and investor-friendly approach. For Noida, a thriving commercial hub, these initiatives will drive demand, attract global investors, and accelerate sustainable urban development. The new valuation rule for self-occupied properties boosts real estate sentiment, while the hike in the TDS threshold for rent​ to Rs 6 lakh eases compliance and benefits both landlords and tenants. This budget lays a strong foundation for future-ready cities, making real estate and infrastructure a key driver of India's growth story. We look forward to leveraging these opportunities to create world-class commercial spaces," Bhutani added.