As Finance Minister prepares to present Union Budget 2026, India’s real estate sector is watching closely, with developers, homebuyers and industry bodies expecting long-pending reforms that could reshape housing affordability, rental supply and buyer confidence.
Affordable housing definition under review
Industry bodies say the current definition of affordable housing, unchanged since 2017, no longer reflects market realities. With a price cap of ₹45 lakh and strict size limits, many projects have become unviable due to rising land and construction costs. Developers are urging the government to update the norms and introduce a single, uniform definition across schemes such as PMAY, RBI, NHB and RERA to reduce confusion and compliance hurdles.
CREDAI has suggested shifting to an area-based definition, while NAREDCO has proposed increasing the affordable housing price ceiling to ₹75–80 lakh, especially in urban centres.
Rental housing seeks policy support
Rapid urbanisation and migrant movement have increased demand for organised rental housing, particularly in tier-1 and tier-2 cities. However, low rental yields of 1–3 per cent make such projects unattractive for developers. Industry groups are calling for a National Rental Housing Mission with tax incentives for builders and relief for tenants to formalise the rental market and support workforce mobility.
Tax relief for homebuyers in focus
Another major expectation from Budget 2026 is a revision of the ₹2 lakh housing loan interest deduction limit, which has not changed in over a decade. With higher loan sizes today, developers argue that raising this cap—or removing it for first-time buyers—would provide meaningful relief to the middle class and revive housing demand.
Accountability and senior living concerns
Homebuyer groups have stressed the need for stricter accountability for delayed projects, while developers in the senior living segment are seeking infrastructure status to access long-term, low-cost funding.
Overall, the sector hopes Budget 2026 will balance growth with affordability, strengthen trust, and address housing needs across income groups and age segments.