Real Estate Sector Seeks Urgent Policy Support Ahead of Budget 2026
As anticipation builds for the Union Budget 2026, India's real estate industry is making a strong case for immediate policy interventions. Industry leaders warn that growth patterns across the sector have become increasingly uneven. They emphasize the need for targeted measures to revive affordable housing and strengthen rental housing frameworks.
Structural Imbalances in Housing Market
Anuj Puri, Chairman of ANAROCK Group, points out a concerning trend. "India's housing story remains strong on the surface but is structurally imbalanced underneath," he states. Puri highlights specific data to illustrate this point. In 2025, new home sales volumes actually fell by 14 percent. However, the total sale value increased by 6 percent, reaching nearly 6 lakh crore rupees. This divergence clearly indicates that luxury housing segments are thriving while affordable housing faces significant stress.
Key Demands for Affordable Housing
Puri outlines several critical recommendations for Budget 2026. He calls for continued acceleration of last-mile urban infrastructure development. Such investments would directly boost real estate activity. Puri also urges the government to reintroduce the full 100 percent tax holiday under Section 80-IBA of the Income Tax Act. This incentive previously played a vital role in encouraging affordable housing launches and attracting developer participation.
Furthermore, Puri advocates for a crucial revision in the definition of affordable housing. "A 45-lakh price cap no longer reflects real ground realities," he argues. He proposes raising the affordable housing threshold to at least 95 lakhs for Mumbai and 75 lakhs for other major metropolitan cities. This adjustment should retain existing size norms to ensure the policy's original intent.
Focus on Rental Housing Reforms
Niranjan Hiranandani, Chairman of NAREDCO, emphasizes that rental housing must become a central pillar of the 'Housing for All' vision. He presents specific policy changes. Hiranandani strongly recommends removing stringent conditions under Section 80 IBA(6)(da) of the Finance Bill. He also suggests extending the benefit period for affordable rental housing projects to a minimum of five years.
Additionally, Hiranandani proposes a significant tax exemption. He believes rental income from properties held as stock-in-trade should be exempt from taxation for five years after construction completion. This measure would recognize the long-term investment nature of such projects. On taxation matters, he criticizes the current stamp duty mechanism based on circle or ready reckoner rates. He states this system often overburdens both buyers and sellers. Hiranandani also flags concerns about the disallowance of set-off of losses against income from house property, arguing it discourages individual investment in rental assets.
Broader Economic and Development Perspectives
Anshuman Magazine, Chairman and CEO for India, South-East Asia, Middle East and Africa at CBRE, offers a wider view. He says Budget 2026 should focus on deepening housing affordability while simultaneously boosting overall consumption. Magazine suggests several strategic moves. Strengthening rental housing policies and providing clarity on a long-term framework for urban redevelopment could help address supply gaps in high-density cities.
He also advocates for faster project approvals through single-window clearances. Coupled with incentives for sustainable and green construction, these steps would improve project viability and boost investor confidence. Magazine notes another important trend. As more multinational corporations view India as a Global Capability Center hub, the government should focus on skilling initiatives, particularly in fast-growing fields like Artificial Intelligence and Machine Learning.
Call for Stability and Infrastructure Focus
Pyush Lohia, Director at Lohia Worldspace, stresses the importance of policy stability. He identifies three crucial areas: infrastructure-led capital expenditure, continued personal income tax rationalization, and regulatory clarity. Lohia explains, "Continued rationalization of personal income tax is expected to ease the burden on the middle class and boost disposable incomes."
From a business perspective, he emphasizes that infrastructure-led capital expenditure, especially in urban development, logistics, and housing, will be vital for driving employment and attracting investment. Lohia further recommends support for MSMEs through easier credit access and GST simplification to strengthen economic momentum. He adds that incentives for green construction, renewable energy, and water conservation can promote sustainable growth across the sector.
Industry Consensus on Balanced Approach
Real estate leaders collectively agree on a fundamental point. A balanced Union Budget 2026 that effectively addresses the needs of both affordable and rental housing could be critical. Such a budget has the potential to restore broad-based growth across India's real estate sector. The industry's unified message is clear: targeted policy support is now essential to correct structural imbalances and ensure inclusive development.
