Union Budget 2026: Real Estate Developers Advocate for Affordable Housing Boost
As the Union Budget 2026 approaches, real estate developers across India are actively lobbying the government to implement measures that will significantly enhance the affordable housing sector. Industry stakeholders are emphasizing the critical need for reductions in land costs and comprehensive tax relief to make housing more accessible to the masses.
Current Tax Disparities in Housing Development
At present, the tax framework provides a notable advantage to manufacturing companies engaged in infrastructure and housing projects near their facilities. These entities benefit from a reduced tax rate of 15 per cent, which is designed to encourage development in proximity to industrial zones.
However, this beneficial tax rate is not extended to other business structures, such as Limited Liability Partnerships (LLPs), partnership firms, or proprietorship entities. This disparity creates an uneven playing field, potentially hindering the participation of smaller and medium-sized developers in affordable housing initiatives.
Key Demands from the Real Estate Sector
In anticipation of the Union Budget 2026, real estate representatives have outlined several key demands aimed at revitalizing the housing market:
- Reduction in Land Acquisition Costs: Developers are seeking government intervention to lower the cost of land, which is a major component of overall project expenses. Cheaper land would directly translate to more affordable housing units for end consumers.
- Expansion of Tax Benefits: There is a strong call to extend the 15 per cent reduced tax rate currently available to manufacturing companies to include LLPs, partnerships, and proprietorships. This move would level the competitive landscape and incentivize broader participation in housing development.
- Enhanced Incentives for Affordable Projects: Additional tax reliefs and subsidies specifically targeted at projects classified under affordable housing schemes are being proposed to ensure that development aligns with national housing goals.
Potential Impact on the Housing Market
If these demands are incorporated into the Union Budget 2026, the real estate sector anticipates a substantial boost in the construction of affordable homes. By addressing both land cost and tax-related barriers, the government could stimulate increased investment, accelerate project completions, and ultimately make homeownership more attainable for a larger segment of the population.
The upcoming budget is seen as a pivotal opportunity to address long-standing challenges in the housing industry and to reinforce the government's commitment to providing Housing for All. Industry experts believe that targeted fiscal measures could not only spur economic growth within the real estate sector but also contribute to broader social welfare by improving living standards.
