New Delhi: With Union Budget 2026 around the corner, the real estate industry has called for urgent policy intervention to revive affordable housing and
give a stronger push to rental housing, warning that growth in the sector is becoming increasingly uneven.
Anuj Puri, Chairman of ANAROCK Group, said that while India’s housing market appears strong on the surface, deeper structural issues remain.
“In 2025, the new home sales volumes fell 14 per cent, yet the sale value rose 6 per cent to nearly 6 lakh crore. This clearly shows that luxury housing is thriving, while affordable housing is under stress,” Puri said.
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He said Budget 2026 should continue to focus on last-mile urban infrastructure, which has a direct impact on real estate development. Puri also urged the government to reintroduce the 100 per cent tax holiday under Section 80-IBA, saying the earlier incentive had played a key role in boosting affordable housing launches and encouraging developer participation.
“We also feel that Budget 2026 should redefine affordable housing to reflect the market reality. A 45-lakh price cap no longer reflects real ground realities. Affordable housing threshold needs to be raised to at least 95 lakhs for Mumbai and 75 lakhs for other major cities whilst retaining the size norms,” he added.
Niranjan Hiranandani, Chairman of NAREDCO (National Real Estate Development Council), said rental housing must become a core part of the government’s ‘Housing for All’ vision.
“We strongly urge the removal of the stringent conditions under Section 80 IBA(6)(da) of the Finance Bill and recommend extending the benefit period for affordable rental housing projects to at least five years. Further, rental income from properties held as stock-in-trade should be exempt from taxation for five years after construction completion, recognising the long-term nature of these investments,” Hiranandani said.
He also raised concerns over taxation, saying the current stamp duty mechanism based on circle or ready reckoner rates often puts an excessive burden on buyers and sellers. Hiranandani further flagged the disallowance of set-off of losses against income from house property, noting that it discourages individual investment in rental housing.
Anshuman Magazine, Chairman and CEO for India, South-East Asia, Middle East and Africa at CBRE, said Budget 2026 should focus on improving housing affordability while also boosting overall consumption.
“Strengthening rental housing policies and providing clarity on the long-term framework for urban redevelopment may also help address supply gaps in high-density cities. Faster project approvals through single-window clearances, coupled with incentives for sustainable and green construction, would improve project viability and investor confidence. Moreover, as more MNCs look at India as a GCC (Global Capability Center) hub, the government may also focus on skilling especially in fast-growing fields like AI and ML (Machine Learning),” he said.
Pyush Lohia, Director at Lohia Worldspace, said policy stability and continued government spending on infrastructure would be critical to sustaining growth.
“Continued rationalisation of personal income tax is expected to ease the burden on the middle class and boost disposable incomes. From a business standpoint, regulatory clarity and infrastructure-led capital expenditure, especially in urban development, logistics, and housing, will be crucial for driving employment and investment,” Lohia said.
He added that support for MSMEs through easier credit access and GST simplification would further strengthen economic momentum. “Additionally, incentives for green construction, renewable energy, and water conservation can promote sustainable growth,” he said.
Industry leaders said a balanced Budget 2026 that addresses the challenges facing affordable and rental housing could play a key role in reviving broad-based growth across India’s real estate sector.
(With inputs from ANI)
