The Union Budget 2025 has introduced significant reforms aimed at strengthening real estate investment and boosting homeownership in India. Key announcements include increased tax relief for self-occupied properties, enhanced disposable income for middle-class buyers, and an expanded SWAMIH Fund to revive stalled housing projects.
Finance Minister Nirmala Sitharaman announced that under the new tax regime, no income tax will be payable up to ₹12 lakh (₹12.75 lakh including standard deductions). This move is expected to enhance homebuyers' spending power and drive investments in the real estate sector.
Additionally, the Budget removes the condition that allowed homeowners to claim tax exemption on only one self-occupied property. Now, individuals can claim tax exemption on two self-occupied homes, reducing tax liabilities and encouraging second-home investments.
To provide relief to homebuyers affected by delayed projects, the government has allocated ₹15,000 crore to SWAMIH Fund 2, aiming to complete 1 lakh stalled housing units. This is in addition to the existing 50,000 completed units and 40,000 more in progress under the first SWAMIH initiative.
Experts believe that this expansion will:
The government has raised the TDS threshold on rental income from ₹2.4 lakh to ₹6 lakh per year, significantly benefiting small landlords and tenants. This move reduces compliance burdens and enhances cash flow for property owners.
According to real estate analysts, this reform will:
To enhance urban infrastructure and real estate potential, the government has introduced a ₹1 lakh crore Urban Challenge Fund. This initiative aims to:
The government has announced a National Guidance Framework to help states attract and promote Global Capability Centres (GCCs). This initiative is expected to drive demand for office spaces in major metros like Mumbai, Bengaluru, Hyderabad, Pune, and Chennai, along with Tier-II and Tier-III cities.
Despite various positive measures, Budget 2025 does not include new policies for affordable housing. Industry experts believe that a national rental housing policy and an update to affordable housing definitions are crucial to bridging the housing gap.
G Hari Babu, National President of NAREDCO, emphasized that outdated affordable housing caps and rising home loan interest rates continue to challenge developers and homebuyers in this segment.
Budget 2025 brings substantial tax relief, higher disposable income, support for stalled projects, and ease of rental taxation, fostering a positive outlook for real estate. While affordable housing policies remain unaddressed, the initiatives announced are set to drive investments and homeownership in the coming years.
Stay tuned for more updates on how these budget reforms impact the Indian real estate sector.
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