The upcoming Union Budget 2025 presents a pivotal opportunity to implement strategic policy reforms that can significantly enhance the real estate sector’s contribution to India’s economic development. By addressing key areas such as affordable housing, industry status recognition, taxation, regulatory frameworks, infrastructure development, sustainable building practices, and foreign investment, we can stimulate growth and achieve our nation’s economic objectives.
1. Revitalizing Affordable Housing Initiatives
Reinstatement of Section 80-IBA Benefits
To encourage the development of affordable housing projects, it is imperative to reinstate and extend the benefits under Section 80-IBA. This provision offers a 100% tax exemption on profits derived from affordable housing projects, thereby incentivizing developers to invest in this crucial segment.
Enhancement of Tax Deductions on Home Loan Interest
Increasing the tax deduction limit on housing loan interest under Section 24(b) from the current ₹2 lakh to ₹5 lakh will make homeownership more accessible to a broader population, thereby stimulating demand in the housing market.
Updating the Definition of Affordable Housing
The existing price and size thresholds for affordable housing do not align with current market realities. Revising these parameters, particularly in Tier 2, 3, and 4 cities, will encourage both supply and demand, addressing the housing shortage effectively.
2. Granting Industry Status to Real Estate
Facilitating Easier Access to Financing
Recognizing real estate as an industry is a long standing demand and will streamline access to financing, reduce interest rates, and attract substantial institutional investments, thereby bolstering the sector’s growth and stability.
Also Read: Real Estate in India: A Catalyst for Economic Growth and Impact of Govt Policies
3. Implementing Taxation and GST Reforms
Exemption of GST on Joint Venture Agreements
Waiving the Goods and Services Tax (GST) on Joint Venture agreements will lower transaction costs and promote collaborative real estate projects, fostering innovation and efficiency in the sector.
Reduction of GST on Construction Materials
Rationalizing GST rates on essential construction materials such as steel and cement will decrease input costs, making housing more affordable and projects more financially viable.
4. Streamlining Regulatory and Approval Processes
Establishment of a Single-Window Clearance System
Implementing a single-window clearance mechanism will expedite project approvals, reduce bureaucratic delays, and lower overall project costs, thereby enhancing efficiency in project execution.
Accelerated Digitization of Land Records
Fast-tracking the digitization of land records will increase transparency, minimize disputes, and boost investor confidence in real estate transactions.
5. Advancing Infrastructure Development and Urban Expansion
Increased Budget Allocation for Infrastructure Projects
Allocating additional funds for infrastructure projects such as roads, metro connectivity, and smart city initiatives will stimulate real estate demand and drive economic growth.
Development of Growth Corridors in Emerging Cities
Expanding connectivity in emerging cities will alleviate congestion in metropolitan areas and create new hubs for real estate investment, promoting balanced regional development.
6. Encouraging Sustainable and Green Building Practices
Incentives for Eco-Friendly Projects
Providing tax benefits and subsidies for environmentally friendly, energy-efficient buildings will promote sustainable construction practices and reduce the sector’s carbon footprint.
Also Read: India’s Real Estate Market: A $10 Trillion Growth Path by 2047
7. Promoting Foreign Direct Investment (FDI) in Real Estate
Allowing FDI in Limited Liability Partnerships (LLPs)
Permitting FDI in LLPs within real estate projects will enhance investment transparency and attract foreign capital, as all projects are registered under the Real Estate (Regulation and Development) Act (RERA).

By implementing these strategic policy reforms in the Union Budget 2025, we can stimulate housing demand, encourage the development of affordable housing, and drive overall growth in the real estate sector. These measures will not only benefit the industry but also boost consumption, enhance the service sector, increase state revenues, and contribute significantly to India’s economic ambitions, including the vision of a $5 trillion economy.