By Manish Agarwal

As India prepares the 2026 Union Budget, few sectors sit as centrally at the intersection of growth, employment, urbanisation, and capital formation as real estate. No longer a passive beneficiary of economic expansion, the sector today is a prime mover of India’s transition towards a high-income economy. After a year marked by structural maturity and lifestyle-led demand, the outlook is one of cautious optimism, tempered by the need for fiscal precision and regulatory clarity.

Residential real estate remains the backbone of the sector, supported by robust end-user demand across mid-income, premium, and luxury housing. Homebuyers increasingly seek larger formats, integrated communities, wellness-oriented amenities, and long-term liveability. However, affordability pressures are mounting for first-time and mid-income buyers due to rising land prices, construction costs, and elevated home loan interest rates.

To address this imbalance, a meaningful enhancement of the home loan interest deduction under Section 24(b) from ₹2 lakh to ₹5 lakh is essential. This limit has remained unchanged for over a decade despite sharp escalation in urban housing prices. Such a move would directly improve household cash flows and restore affordability in key urban markets.

Rationalisation of GST and a calibrated reduction in stamp duty would further lower transaction costs, improve liquidity, and encourage formal transactions. Clear and predictable taxation norms for second homes, capital gains, and long-term ownership are critical to sustaining investor, NRI, and HNI participation.

India’s commercial real estate narrative continues to strengthen, driven by the rapid expansion of Global Capability Centres, technology firms, and professional services. While hybrid work models have altered space utilisation, demand for high-quality, Grade-A office assets remains resilient.

Real Estate Investment Trusts have emerged as a vital conduit for institutional capital. Continued policy support through tax efficiency, simplified capital gains treatment, and wider participation via Small and Medium REITs will deepen capital markets and enhance transparency.

Against this backdrop, the 2026 Union Budget presents an opportunity to reinforce real estate as a pillar of sustainable economic growth.

Budget Asks 2026 | Priorities for a Sustainable Real Estate Ecosystem

1.       Increase the Section 24(b) home loan interest deduction limit from ₹2 lakh to ₹5 lakh to restore affordability.

2.       Rationalise GST and stamp duty to reduce transaction costs and improve housing liquidity.

3.       Ensure stable and predictable taxation for capital gains, second homes, and long-term ownership.

4.       Facilitate access to long-tenure, lower-cost financing for RERA-compliant projects.

5.       Implement digitised, time-bound single-window clearances with deemed approvals.

6.       Support commercial real estate and GCC growth through policy stability.

7.       Enhance tax efficiency and capital gains treatment for REITs, including SM REITs.

8.       Grant infrastructure status to hospitality and service apartment projects.

9.       Enable build-to-rent housing and fast-track urban redevelopment projects.

10.   Incentivise ESG-compliant construction, green buildings, and PropTech adoption.

Beyond sector-specific measures, sustained infrastructure investment will remain the single greatest catalyst for real estate growth. A fiscally balanced yet growth-oriented Budget can position real estate not merely as an asset class, but as national infrastructure powering jobs, investment, and sustainable urban development over the next decade.

(The author is Managing Director, Satya Group, and President, CREDAI Haryana. Views are personal)