Real estate experts anticipate key reforms in the Union Budget 2025
As Finance Minister Nirmala Sitharaman prepares to present the Union Budget for 2025–26 on February 1, the real estate sector is keenly awaiting measures that could address the long-standing challenges in affordable housing and liquidity. With an ambitious “Housing for All” vision already in motion, industry leaders and stakeholders are looking for additional reforms to accelerate growth, reduce financial pressure on developers, and ensure that affordable housing projects move forward without delays. The sector, although buoyed by various government schemes, remains in need of additional fiscal and policy support.
Affordable housing has been a key focus of government policy for several years, but despite efforts, a considerable market gap persists. Developers, especially in tier-2 and tier-3 cities, are feeling the pinch as they struggle to complete projects on time, while homebuyers continue to face affordability challenges. Experts like Aman Gupta, Director at RPS Group, express optimism that the upcoming budget could deliver much-needed reforms. Gupta suggests that tax relief for builders of affordable housing units, along with an increase in the limits under Section 80 EEA for homebuyers, would encourage both developers and buyers. A reduction in the Goods and Services Tax (GST) rates on under-construction properties would provide relief to first-time homebuyers, thereby stimulating demand and contributing to the goal of “Housing for All.” These measures would also provide an impetus to the affordable housing segment, making it financially viable for both builders and buyers.
Another critical concern for the real estate sector is liquidity. Developers often face cash flow constraints, particularly those who are working with tight construction timelines. Sandeep Mangla, Managing Director of Forteasia Realty Pvt. Ltd., points out that liquidity remains one of the most pressing challenges in the sector, hampering the timely completion of projects. With real estate prices rising, developers are increasingly dependent on institutional funding to support their cash flow needs. Mangla further emphasises that the sector would benefit greatly from specific funds dedicated to distressed assets, ensuring that ongoing projects are completed, which in turn would boost buyer confidence. These funds would act as a safety net, ensuring that developers can overcome financial hurdles and complete projects within the stipulated timeframes, offering assurance to end-users who are waiting for possession.
Sustainability remains another key aspect that the real estate sector hopes will be addressed in the upcoming budget. Given the growing emphasis on environmental responsibility, it is expected that budgetary provisions for green building certifications, eco-friendly construction practices, and sustainable infrastructure development will take centre stage. The increasing demand for energy-efficient homes and low-carbon footprint buildings calls for a holistic approach to real estate development, where sustainability and profit are not mutually exclusive. By incentivising green building practices through tax relief and concessional financing options, the government can steer the sector towards more environmentally conscious growth, benefitting both the economy and the environment.
In conclusion, as India’s real estate sector braces for the Union Budget 2025, there is cautious optimism regarding possible reforms aimed at boosting affordable housing, enhancing liquidity, and ensuring the completion of projects. The real estate sector has long been a cornerstone of India’s economic growth, and the right policy interventions can not only help the sector overcome its current challenges but also lay the foundation for a more sustainable and efficient housing market in the years to come. With expectations running high, stakeholders are hoping that the 2025 budget will address these crucial issues and enable the sector to thrive, contributing to the government’s vision of “Housing for All” while ensuring timely project completions and financial stability.
