India’s rental housing market remains one of the most underdeveloped segments of urban real estate, even as demand continues to rise sharply. With higher job mobility, rapid urbanisation and homeownership
being deferred by young professionals, experts believe rental housing demand is now structural rather than cyclical—and Budget 2026 could be a turning point.
Aman Gupta, Director, RPS Group, says the government has a chance to unlock long-term value by moving beyond the traditional sale-led housing model. He believes policy support through tax clarity, lower GST on construction for rental assets and incentives for build-to-rent projects can help developers scale professionally managed rental housing. Strengthening the REIT framework, he adds, will also allow developers to recycle capital while retaining operational control, making rental assets financially viable over the long run.
Echoing this view, Aditya John, Founder and Director, HowToDXB Real Estate & Limehouse Real Estate, says rental housing must be treated like infrastructure rather than informal income. He expects Budget 2026 to offer targeted tax incentives for build-to-rent developments, particularly near industrial hubs and transport corridors. He also flags the need for a simpler, more stable REIT tax structure, noting that the current complexity around distribution components discourages wider retail participation.
Beyond housing supply, experts say the Budget must address the financial invisibility of renters. According to Sarika Shetty, Co-founder and CEO, RentenPe, rent is the single largest monthly expense for millions of Indians, often consuming 30–40% of income. Yet timely, digital rent payments do not contribute to credit profiles. With nearly 35% of Indians living on rent and over Rs 2.5 lakh crore in annual rental transactions, recognising rent payments as a marker of financial discipline could transform credit inclusion.
Pawan Agarwal, MD, NK Realtors, agrees, saying renters have long been excluded from formal credit systems despite consistently meeting rent obligations. Including rental payment behaviour in credit assessments could help lenders build trust with first-time borrowers, especially young professionals and internal migrants.
Experts say a supportive Budget—focused on rental housing supply, REIT reforms and credit recognition for renters—can boost affordability, attract long-term capital and align India’s housing policy with the realities of its growing urban population.
