Summary of this article
Tax relief & affordability: Higher home loan tax benefits, revival of Section 80EEA, and redefining affordable housing for large cities.
Faster approvals: Single-window clearance system to cut delays, reduce costs, and improve delivery timelines.
Policy clarity & GST reforms: Clearer GST rules and input tax credit benefits to improve project viability and pricing efficiency.
Rental & long-term capital push: Support for rental housing and incentives to attract domestic and institutional investment across segments.
With the Union Budget for FY 2026–27 round the corner, India’s real estate sector is sharpening its wishlist, seeking targeted policy support to address emerging structural gaps while sustaining the momentum built over recent years. Contributing close to 7 per cent to the country’s GDP and employing over 70 million people, the sector is widely seen as a critical lever for economic growth, urban transformation, and job creation.
Industry stakeholders believe the upcoming Budget presents a timely opportunity to recalibrate housing incentives in line with rising urban costs, revive the underperforming affordable housing segment, and lay the foundation for a robust, long-term rental housing ecosystem. Key expectations range from enhanced tax relief for homebuyers and faster, single-window project approvals to clearer regulatory frameworks that improve project viability and attract patient domestic and institutional capital.
With affordability pressures mounting, approval timelines stretching, and capital costs remaining elevated, developers and consultants alike argue that a balanced Budget - one that improves buyer access, execution efficiency, and policy predictability - could unlock the next phase of housing-led growth while strengthening India’s overall real estate investment climate.
Talking about the industry’s expectations from the budget, Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, says that the upcoming Union Budget for FY2026-27 requires specific housing sector interventions to handle the increasing structural imbalances which affect this industry. The residential market has maintained its stability, but affordable housing faces ongoing difficulties because people cannot afford homes, building expenses have increased, and buyers lack sufficient financial backing. This sector will continue to show weak demand because policymakers have not taken the necessary steps to modify their current policies.
“The present housing incentives require immediate adjustment because urban areas now experience different cost patterns, which major cities must address since market prices exceed actual values. Home purchase financial assistance through specific government programs and better project evaluation systems will generate higher market demand and property supply levels. The government also needs to create a permanent rental housing system which will serve as its official housing solution,” he adds.
A regulatory system which supports rental housing with financial backing will enable better use of existing properties while it supports employee relocation and draws in long-term financial resources from institutional investors who have not yet entered this market.
India’s housing market needs policies that bring the middle class back into the buying cycle. Latest data from NoBroker shows that nearly 42 per cent of Bengaluru buyers and close to 40 per cent of Mumbai home seekers are already priced out of homes under Rs 1 crore, even though demand is still growing. This gap is being driven by rising costs and a strong shift toward premium launches.
“Budget 2026 can help by improving tax benefits on home loans, redefining affordable housing for big cities, and giving developers incentives for the affordable and middle-income segment. Equally important is introducing a true single-window clearance system so approvals don’t drag on for years and push up project costs. Faster clearances mean quicker delivery and lower prices for buyers. Along with support for rental housing and lower construction taxes, a pro-housing budget can boost jobs, spending and long-term economic stability,” observes Amit Agarwal, Co-founder and CEO, NoBroker.
Moreover, as the luxury housing segment enters a more structurally mature phase in 2026, the forthcoming Union Budget presents a timely opportunity to reinforce growth through targeted, market-aligned policy interventions.
“The industry expects rationalisation of transaction costs, clearer and more consistent GST benefit transmission, and fiscal incentives that actively promote high-quality, sustainable, and design-led development. While the government’s continued emphasis on affordable housing and urban infrastructure remains critical to maintaining overall sector momentum, calibrated policy measures that acknowledge the luxury segment’s capacity to attract long-term domestic and global capital can significantly enhance India’s positioning as a credible, globally competitive luxury real estate market,” says Ankush Kaul, President – Sales, Marketing & CRM at Gurugram-based realty major Central Park.
The real estate industry's hopes are grounded in financial reality rather than short-term stimulus.
Avneesh Sood, Director of Eros Group, says, “Over the past few years, project economics have changed a lot. The steady increase in land costs, construction costs, compliance costs, and mostly stagnant taxation structures continue to erode affordability and profitability across the board. The deployment of GST in construction, in conjunction with clearer guidance on input tax credits, can minimise cost leaks and improve pricing efficiencies. Beginning with future-oriented projects, enhancing access to liquidity is critical, along with streamlining capital flow. The 2026 budget, thus, may provide an opportunity to align tax and financing policies with the current budget market. Also, this can foster a self-regulated growth, punctual, and sustainable delivery within the real estate sector.”
Ahead of Budget 2026, the real estate industry expects the government to adopt a holistic approach. Enhancing tax incentives for individuals can strengthen housing demand, while rational taxation and policy clarity can enhance the viability of office and retail developments.
“Faster project approvals through a single-window clearance system remain essential to reduce cost overruns and execution delays. We believe a budget that balances buyer affordability, execution efficiency, and long-term capital deployment will not only improve project feasibility but also attract sustained domestic and institutional investment, creating a more investable real estate ecosystem," says Sandeep Chhillar, Founder & Chairman, Landmark Group.
The budget is also expected to give a boost to the momentum experienced by the sector over the last few years. While infrastructure development may continue to receive higher allocation, it is hoped that the accommodative stance on the repo rate, along with continued thrust on growth and measures to keep inflation under control, will be accorded priority.
“We also appeal to the government to consider widening the scope of EWS and PMAY, and reinstate the benefits under Section 80EEA. These steps will bring relief to the first-time homebuyers and provide a much-needed fillip to the affordable housing segment. Further, the introduction of a single-window clearance system and the grant of industry status to the real estate sector are key demands that we hope the forthcoming budget will address,” says Manoj Gaur, CMD, Gaurs Group.
Budget 2026 is an opportunity to finally align policy with the sector’s economic weight. One long-standing expectation is the grant of industry status to real estate, which would significantly improve access to organised financing and reduce the cost of capital, critical for large, design-led luxury projects with long gestation cycles.
“Today’s premium developments are not speculative assets; they are capital-intensive infrastructure plays that require policy recognition and institutional support. Alongside this, a single-window clearance mechanism would be transformational, reducing approval delays that often distort project timelines and pricing. The sector also looks forward to the creation of a dedicated revival fund for stalled projects at both the Central and state levels, aimed at fast-tracking completion, enabling the timely delivery of homes and restoring buyer confidence,” says Saurab Saharan, Group Managing Director, HCBS Developments.
