With the Union Budget 2026 around the corner, India’s real estate sector is hoping the government will use the fiscal roadmap to address rising housing costs, revive buyer sentiment and strengthen long-term urban growth. 

A key expectation centres on reviving demand by improving housing affordability for end-users, particularly first-time and mid-income homebuyers. Rising land prices and higher construction costs has stretched the budgets for these homebuyers.

Accordingly, the real estate has called for the reintroduction and extension of the Credit Linked Subsidy Scheme (CLSS), along with a meaningful enhancement of tax benefits on home loans under the provisions of the Income Tax Act. The sector also hopes for a revision and standardisation of the definition of affordable housing to reflect current market realities. 

On the taxation front, the sector expects rationalization of GST rates for under-construction homes, construction materials and co-working services. It also hopes for the reinstatement of input tax credit (ITC) for residential construction along with rationalization of stamp duty and a move towards a uniform framework across states. These measures would help reduce the overall transaction cost for the buyers.

On the capital front, the sector has reiterated its long-standing demand for industry status, which would ease access to institutional finance and lower borrowing costs. The sector further hopes for higher investment limits for insurance companies and greater participation by provident and pension funds in REITs and SM-REITs, which are increasingly seen as a way to democratise real estate investment.

The sector also expects measures aimed at further boosting infrastructure development across the county. These include faster approvals, streamlined regulations and effective single-window clearance systems to improve project execution, particularly for redevelopment projects in dense urban markets. Monetisation of government land is another area that could unlock supply and support planned urban growth.

In the industrial segment, policy support for plug-and-play industrial parks, shared infrastructure and faster approvals is being seen as critical to supporting MSMEs and manufacturing-led growth.

Outlook:

The domestic real estate sector expects Union Budget 2026 to provide stability, clarity and a visible long-term direction that strengthens its role in India’s economic and urban transformation. The industry will be looking for measures that further improve housing affordability and ease project execution. Market will also be expecting improved access to financing—particularly for affordable and mid-income housing to ensure that the current low levels of interest rates translate into meaningful flow of funds for this critical real estate segment.