As preparations for the Union Budget 2026 gather pace, the real estate and housing finance industry is calling for targeted tax relief, rationalisation of provisions under the new Income-tax Act, 2025,
and policy stability to revive housing demand and long-term capital flows.
PHD Chamber of Commerce and Industry (PHDCCI) has flagged several concerns around real estate taxation that it believes could slow housing supply and rental stock creation if left unaddressed. In a representation to Finance Minister Nirmala Sitharaman, PHDCCI President Rajeev Juneja said the upcoming Finance Bill, 2026 is the last opportunity to recalibrate provisions before the new tax law takes effect from April 1, 2026.
The chamber stressed that taxing notional rent on unsold housing stock, limiting loss set-off from house property, and low safe-harbour limits on circle rate differences add pressure on developers, especially during weak market cycles. It has sought deletion or relaxation of these provisions to support housing supply and employment, noting that real estate remains the country’s second-largest employer.
Focus on Homebuyers, Affordability
From the housing finance side, Atul Monga, Co-Founder and CEO of BASIC Home Loan, said Budget 2026 should focus on improving affordability for genuine homebuyers rather than short-term rate signals.
He pointed out that for first-time and affordable homebuyers, stable EMIs, clear tax benefits and easier access to credit matter more than marginal interest rate changes. Enhancing deductions on home loan interest and principal repayment, restoring higher limits for self-occupied homes and offering targeted relief to first-time buyers could revive demand without pushing up property prices, he said.
Monga also highlighted that NBFCs and fintech lenders continue to operate in a tight regulatory and funding environment. Policy continuity, better access to liquidity and support for tech-led underwriting can help these players expand credit responsibly, especially for self-employed and informal borrowers who remain underserved by banks.
Capital Flows, Investor Confidence
Rohan Khatau, Director at CCI Projects, said Budget 2026 will be crucial for shaping long-term capital flows into real estate. He emphasised the need for infrastructure push, clarity on REIT and InvIT taxation, and incentives that encourage private and institutional participation.
According to him, tax reliefs help ease decision-making for fence-sitting buyers, while policy continuity and fiscal discipline are key to sustaining investor confidence and enabling developers to plan and scale projects aligned with urban demand.
Developers Seek Growth-Oriented Signals
Echoing similar views, Amit Jain, CMD of Arkade Developers Limited, said the development community is looking for clear, growth-oriented fiscal signals in Budget 2026. He said expectations include support for MSMEs, incentives for technology and AI adoption, and measures to stimulate consumption and job creation.
Jain added that meaningful tax rationalisation and targeted relief, especially in affordable and mid-income housing, could improve project viability and help bridge the demand-supply gap in urban housing.
With global uncertainty and shifting geopolitics, experts broadly agree that housing-led domestic growth can act as a natural economic hedge. A forward-looking Union Budget 2026 that balances fiscal discipline with targeted support for housing, homebuyers and developers could strengthen financial resilience and reinforce India’s long-term growth story.
