Budget 2026: Holiday Home Segment Seeks Policy Push and Tax Clarity

Holiday homes in India are undergoing a structural shift - from aspirational leisure purchases to viable long-term investment assets. As the Union Budget 2026–27 approaches, developers and investors alike are seeking policy support, improved infrastructure and tax clarity to accelerate growth in this lifestyle-led segment. With strong traction in tourism-centric and Tier 2 destinations, the upcoming Budget is expected to play a critical role in shaping the next phase of demand.

Once considered aspirational indulgences, holiday homes are now being viewed as serious investment assets, driven by work-from-anywhere flexibility, rising disposable incomes and a growing preference for experience-led living.

With demand picking up across tourism-driven markets such as Goa, Uttarakhand, Himachal Pradesh and parts of South India, industry leaders are looking to Budget 2026 for policy clarity, infrastructure push and tax rationalisation to sustain this momentum and unlock long-term value creation.

Sheeshram Yadav, Managing Director, Yugen Infra, says, “The second-home and holiday-home segment has emerged as the strongest lifestyle-led growth driver in Indian real estate. The shift to work-from-home, rising disposable incomes, and a growing preference for experiences over material purchases have transformed holiday homes from a dream acquisition into a viable investment option. Buyers are increasingly favouring destinations such as Goa, Dehradun, Rishikesh, Alibaug, Coorg and Udaipur, as well as select locations in Himachal Pradesh and Uttarakhand, not just for leisure but also for long-term capital appreciation and rental income.”

In the first quarter of 2025, the aggregate value of homes sold across India’s top 15 Tier II cities rose 6 per cent year-on-year to Rs 40,443 crore, despite a decline in transaction volumes. Among the notable trends, sales value increased sharply in cities such as Goa, Coimbatore, Lucknow, Kochi, Bhubaneswar and Dehradun, indicating a clear shift towards well-connected, lifestyle-oriented and tourism-driven markets.

On the investment front, holiday homes can offer attractive yields, although careful and disciplined financial planning is essential, particularly during the first couple of years. “Typically, owners need to set aside around 20–23 per cent of the property value annually towards maintenance, property management and general upkeep - especially for homes in seasonal destinations that remain unoccupied for parts of the year. Despite these costs, the upside remains compelling: vacation rentals in tourist hubs such as Goa, Manali and Kerala can command monthly rentals of Rs 25,000–Rs 75,000 during peak seasons, with annual returns ranging between 8 and 12 per cent, depending on the property type, quality and location,” says Yadav.

Looking ahead to Budget 2026-27, the sector anticipates a strong policy continuity along with an infrastructure-centric development focus. The extension of highways, regional airports, and last-mile connectivity to tourism amenities will be the major factors in unlocking the demand for second homes. Besides, a more balance GST framework for premium and lifestyle properties, along with tax clarity in second homes, would significantly enhance buyer confidence and increase potential investor interest.

Aditya Kushwaha, CEO and Director, Axis Ecorp, says, “The Budget will be closely watched by the real estate sector, as it has the potential to set the tone for growth in the year ahead. We expect it to build on the broader policy environment, which has already been supportive of housing and long-term investment. For the holiday home segment, especially in destinations like Goa, continued focus on infrastructure and tourism-led development can be a meaningful driver of demand. There is also clear scope to encourage greater NRI participation through simpler ownership processes and investor-friendly measures. Together, these steps can further strengthen confidence in second homes as lifestyle assets with strong long-term potential.”

Industry experts hope that with supportive policy framework, the second and holiday homes segment can play a vital role in tourism-driven economic growth, generating employment and sustained value creation across India’s real estate ecosystem.