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Budget 2025-26 Set to Energise Urban Development Even as it Boosts Disposable Incomes


New Delhi, February 2, 2025: Budget 2025-26 will be remembered and talked about most for the income tax relief it has brought, but Finance Minister Nirmala Sitharaman had proposals that cheered the real estate sector directly too, with most industry leaders welcoming it. For one, the Budget 2025-26 has simplified the annual value of the self-occupied property. “It is proposed to provide that the annual value of the property consisting of a house or any part thereof shall be taken as nil, if the owner occupies it for his own residence or cannot actually occupy it due to any reason,” the finance minister said while delivering her Budget speech.
In other words, taxpayers can now claim Nil valuation for two self-occupied properties instead of just one. This eliminates the tax on notional rental income from a second home, making residential real estate investments more attractive. Simply put, buying a second home has been incentivized.
Another noteworthy proposal was that an 40,000 more units will be completed in 2025 under the Special Window for Affordable and Mid-Income Housing (SWAMIH) fund. “Under the Special Window for Affordable and Mid-Income Housing (SWAMIH) fifty thousand dwelling units in stressed housing projects have been completed, and keys handed over to homebuyers,” Sitharaman said.
And more is coming. “SWAMIH Fund 2 will be established as a blended finance facility with contributions from the Government, banks and private investors. This fund of INR 15,000 crore will aim for expeditious completion of another 1 lakh units,” Sitharaman said.
The gamechanger mover, of course, was direct tax reform—exempting income up to INR 12 lakh. This move will boost disposable incomes; for the real estate sector this translates into greater affordability and demand. Also, the government’s stated thrust on PPP-driven infrastructure with a structured three-year project pipeline is set accelerate urban expansion, thereby giving a shot in the arm to real estate and housing.
Here’s how the leading lights of the real estate sector responded to Budget 2025-26:
Vivek Sinha, Director, Sales and Marketing, KDMG Group: “Union Budget 2025-26 introduces pivotal reforms. Simplification of the annual value of self-occupied property, setting it at zero even if the owner cannot physically occupy it, reduces tax burdens and encourages homeownership. Continued support for the SWAMIH fund, with another 40,000 units slated for completion in 2025, will provide relief to homebuyers stuck in stalled projects while unlocking liquidity.
“Income tax exemption for earnings up to INR 12 lakh is a significant step toward increasing disposable income, making homeownership more accessible and driving demand. The INR 1 lakh crore Urban Challenge Fund will accelerate city infrastructure development. With a PPP-driven infrastructure pipeline, the sector is set to expand, unlocking growth in both housing and commercial real estate in emerging urban centres. These strategic initiatives position real estate as a resilient and attractive investment avenue.”


Mohit Mittal, CEO of MORES: “The 2025 Union Budget is a game-changer for India’s real estate and urban development. Finance Minister Nirmala Sitharaman’s announcement that the annual value of self-occupied property will be considered nil provides homeowners with greater financial ease, making property ownership more attractive.
“The allocation of 40,000 additional units under the SWAMIH fund offers much-needed momentum to stalled housing projects, unlocking liquidity and ensuring timely completion—thereby boosting buyer confidence. Additionally, the government’s continued emphasis on infrastructure and affordable housing will accelerate urban expansion, increase real estate demand, and drive growth in emerging residential hubs.”
Anoop Garg, Director, Uninav Developers: “The Union Budget 2025-26 sets the stage for accelerated urban expansion and real estate development. The continuation of the SWAMIH fund, aimed at delivering 40,000 additional housing units, is a significant step toward resolving stalled projects and unlocking liquidity in the sector. Additionally, the INR 1 lakh crore Urban Challenge Fund is a landmark initiative that will drive infrastructure growth, enhancing both the livability and investment appeal of cities.
“For developers, this budget presents a golden opportunity to align with the government’s vision of sustainable urbanization. With streamlined taxation on self-occupied properties and a robust PPP-driven infrastructure pipeline, we anticipate a surge in demand for residential and commercial spaces, further cementing real estate as a key pillar of India’s economic growth.”


Pradeep Aggarwal, Chairman, Signature Global (India) Ltd:
“Union Budget 2025 is a game-changer, reinforcing India’s commitment to inclusive and sustainable urban growth. The SWAMIH Fund 2 with INR 15,000 crore will accelerate the completion of stalled housing projects, bringing relief to over one lakh homebuyers. The INR 1 lakh crore Urban Challenge Fund will play a pivotal role in transforming cities into vibrant growth hubs, ensuring balanced regional development.”


Rohit Katyal, Founder & Executive Chairman, Capacit’e Infraprojects:
“Capacit’e Infraprojects welcomes the INR 1 lakh crore Urban Challenge Fund—a visionary step towards sustainable city transformation. This initiative will catalyze smart redevelopment and infrastructure resilience, fostering next-gen urban ecosystems. With INR 10,000 crore allocated for FY 2025-26, the momentum for high-impact urban projects is stronger than ever. We at Capacit’e Infraprojects remain optimistic about the government’s steadfast commitment to infrastructure development, particularly in the housing and urban sectors. The substantial increase in capex allocation for urban infrastructure and affordable housing, alongside a strong focus on green building technologies, aligns perfectly with our vision of delivering sustainable, high-quality construction solutions.”


Routhu Nagaraju, Chief Executive Officer, Experion Developers:
“The Union Budget 2025 has introduced several transformative measures that will significantly impact the real estate sector and urban development. The INR 1 lakh crore Urban Challenge Fund is a visionary step toward modernizing cities, fostering creative redevelopment, and positioning urban centers as growth hubs. This initiative, combined with the National Geospatial Mission to modernize land records and infrastructure planning, will streamline urban development and unlock new opportunities for real estate projects. The announcement of SWAMIH Fund 2.0 is a much-needed boost for homebuyers and developers alike. This will not only revive stalled projects but also restore confidence in the housing market.”


Niranjan Hiranandani, Chairman, NAREDCO & Hiranandani Group:
“From the vantage point of the real estate and infrastructure sectors, the Budget FY26 sets the stage for transformative growth. Central to this budget is its unwavering focus on infrastructure enhancements. Notably, it incentivizes the purchase of a second flat, encouraging real estate.”


Prashant Tiwari, CMD, Prateek Group:
“The revision of the income tax slab is likely to increase disposable incomes, which will, in turn, boost housing demand, particularly among first-time homebuyers. Additionally, the government’s support for affordable housing through the SWAMIH Fund 2.0, which allocates INR 15,000 crore for the completion of 100,000 units, is a significant step towards promoting ‘Housing for All’. This initiative is expected to relieve the financial strain on middle-class families.
“We hoped the government would also address the long-standing request for industry status for the real estate sector. Granting this status could enable developers to access credit funds at lower interest rates. Another major concern is the proposal to reduce the GST on construction services from 18 percent to 12 percent. This reduction would significantly lower project costs, thus enhancing the affordability for homebuyers.”


Salil Kumar, Director (Marketing & Business Management) of CRC Group:
“Union Budget 2025-26 is a pivotal step in accelerating the growth of India’s real estate sector. It creates an environment that encourages homeownership, especially among the middle class. The allocation of INR 1.5 lakh crore for interest-free loans to states will support urban development and infrastructure, further boosting demand for both residential and commercial properties. This budget brings a renewed sense of optimism.”,


Sanjay Sharma Director, SKA Group:
“The government has made commendable efforts for the country’s economic growth, with a focus on tax rationalization and infrastructure expansion. The revised tax slabs will boost disposable incomes and drive demand for housing, especially among first-time homebuyers. Further, an increase in the TDS threshold limit on rent is a significant boost for the rental housing market. In addition, the Urban Challenge Fund will play a pivotal role in transforming cities into vibrant growth hubs.”


Amit Modi, Director, County Group:
“For real estate buyers, the proposal to value two self-occupied properties at nil for tax purposes brings much-needed relief—particularly for middle-class professionals in metro cities who also possess a self-occupied second home in their villages or hometowns. Similarly, raising the TDS threshold on rental income from Rs 2.5 lakh to Rs 6 lakh will benefit those dependent on rental earnings. Furthermore, the revision in tax slabs—exempting income tax up to Rs 12 lakh—places more disposable income in the hands of the middle class.”


Manoj Gaur, CMD, Gaurs Group & Chairman, CREDAI National:
“Budget 2025 underlines the Central government’s commitment to economic expansion, infrastructure advancement, and financial stability, thereby fostering a conducive environment for real estate growth. Measures supporting start-ups and job creation, coupled with much needed reductions in income tax slabs, are set to enhance liquidity and stimulate demand in the sector. While the focus on overall growth is encouraging, we look forward to further initiatives that will accelerate affordable housing development.”


Navin M. Raheja, Chairman and Managing Director of Raheja Developers Limited:
“The government’s allocation of INR 1 lakh crore to the Urban Challenge Fund is a commendable step towards transforming our cities into dynamic growth hubs. This initiative will also create significant opportunities for creative redevelopment, benefiting both developers and residents. The introduction of SWAMIH Fund-2 is a timely intervention to expedite the completion of one lakh dwelling units. This move addresses the pressing issue of stalled projects. Furthermore, the tax relief allowing taxpayers to claim the annual value of two self-occupied properties without conditions is a progressive measure. The increase in the annual TDS limit on rent from INR 2.40 lakh to INR 6 lakh simplifies compliance and is a welcome relief for both landlords and tenants. Additionally, the formation of a committee for regulatory reforms aimed at streamlining approval processes is a significant development. Faster clearances will reduce the cost of housing, enabling developers to deliver projects more efficiently and affordably. We anticipate that these initiatives will lead to increased investment, job creation, and the development of sustainable urban habitats.”


Sandeep Chhillar, Founder and Chairman, Landmark Group:
“The announcement made in the Union Budget shows the government’s balanced approach focused on empowering the middle class, encouraging private investment, and maintaining favourable economic conditions. The reduction in the income tax slab proposes that no income tax is needed to be paid for total income up to INR 12 lakh per annum and this has come as a great encouragement for millions of first-time homebuyers. Besides, the government’s continued focus on strengthening infrastructure across states and cities has been mentioned in this year’s budget as well. Extending support to states, an outlay of 1.5 lakh crore is proposed for the 50-year interest-free loans to states for capital expenditure and incentives for reforms. This will bode well in continuing propelling infra upgradation across the country and drive growth for real estate sector as well.’


Rajjath Goel, Managing Director, MRG Group:
“The allocation for infrastructure development, urban transformation, and SWAMIH Fund 2 along with tax reforms that will improve liquidity lays the foundation of country’s continued economic progress. Steps such as nil tax for two self-occupied properties and rental income upto INR 6 lakh will enhance the lucrativeness of real estate investments. We are hopeful that these measures will lead to sustained real estate expansion, benefiting homebuyers and investors alike.”


Gurpal Singh Chawla, Managing Director, TREVOC:
“The budget effectively balances development priorities with financial stability. The emphasis on infrastructure growth, including the Rs 1 lakh crore Urban Challenge Fund, lays a strong foundation for long-term progress. Additionally, key tax revisions enhance market liquidity ultimately creating an optimistic roadmap for the real estate sector.”


Yash Miglani, MD, Migsun Group:
“Prioritizing private sector investments and uplifting household sentiments is set to strengthen homeownership and commercial expansion, fostering sustained momentum in the real estate sector. Measures aimed at empowering the middle class, including tax relief for individuals with annual incomes of up to INR 12 lakh, will provide significant relief and boost disposable income. These initiatives will reinforce a strong foundation for a resilient, future-ready economy and drive investment in the real estate sector, bolstering confidence and contributing to its growth.”


Ankit Kansal, MD, SKYE:
“In the present Union Budget, GoI has taken some laudable steps to promote the tourism and hospitality industry. The ‘Heal in India’ initiative to project India as a leading medical tourism hub in the world is a positive step. The current size of medical tourism in India is around $9 billion but the underlying potential is much higher. Meanwhile, another important initiative has been offering Mudra Loan to homestay segment in India. The homestay segment in India is rising fast and is becoming one of the key enablers in the hospitality sector. The branded segment alone is growing at a CAGR of 33 per cent and will reach $1,377 million by 2028. The unorganized segment is even larger.”
Pawan Sharma, MD, Trisol RED:
“The revised tax slabs and increased rebate limits under the new tax regime will significantly boost disposable income, leading to higher savings and greater investment in real estate. We anticipate a stronger inclination towards homeownership, particularly in the mid-income segment. Additionally, the extension of tax benefits for investments in infrastructure and real estate will further strengthen capital inflows into the sector. Moreover, the government’s INR 1.5 lakh crore allocation for interest-free loans to states for capital expenditure will drive large-scale infrastructure development. This will enhance urban connectivity, upgrade civic amenities, and improve the liveability of emerging real estate hubs.”


Ravindra Gandhi, Founder and Managing Director of Tirasya Estates:
“The revised tax slabs, which offer increased rebates and lower tax rates, will enhance disposable income, encouraging greater investment in the overall real estate sector, particularly in second homes and vacation properties. The extension of tax benefits for investments in infrastructure and real estate further strengthens Goa’s position as a lucrative destination for both domestic and international investors.”


Gautam Kanodia, Founder of KREEVA and Kanodia Group:
“The Union Budget 2025 has brought major relief to the middle class alongside a bold vision for urban development. The waiving of income tax up to INR 12 lakh will boost the sentiments of middle-class homebuyers. Further, the establishment of the Urban Challenge Fund demonstrates a strong commitment to urban renewal and infrastructural development. This initiative will support the redevelopment of key urban areas, improve infrastructure, and enhance urban livability. Besides, the government’s push for PPP in infrastructure and interest-free loans for capital expenditure and incentives for reforms will help facilitate the development of infrastructure. We believe all these measures will boost economic growth, laying the foundation for an inclusive, modern, and interconnected urban environment.”


Uddhav Poddar, CMD, Bhumika Group:
“The government’s emphasis on infrastructure development and economic prudence sets the stage for sustained real estate growth. A key highlight is the focus on enhancing the role of Public-Private Partnerships (PPP) in India’s infrastructure development, which will boost the country’s commercial projects while ensuring long-term progress. Moreover, the tax slab revision will leave the middle class with more money to consider investing in real estate.”


Ashwani Kumar, Pyramid Infratech:
“The Budget announcements reflect the constructive growth plan chalked out by the government. The emphasis given to the PPP model for infrastructural development and proposing an outlay of INR 1.5 lakh crore for the 50-year interest-free loans to states for capital expenditure will create various opportunities for private players. Besides, we applaud the government’s decision to revise the tax slab. The middle-class will have increased purchasing power and will be able to own their dream home.”


Harinder Singh Hora, Founder Chairman, Reach Group:
“This budget demonstrates the government’s proactive approach towards economic decentralization, with a special focus on promoting the development of GCCs in emerging Tier II cities. This not only nurtures regional growth but also opens doors for talent acquisition, industry partnerships, and innovation. Creation of a dedicated fund for urban development will reshape our cities, providing the infrastructure and workforce required We foresee a significant boost in inclusive economic growth.”


Harsh Gupta, CEO, Sundream Group:
“The Union Budget’s focus on urban development and infrastructure is a major milestone. The boost in investments towards smarter cities, improved connectivity, and strategic infrastructure upgrades sets a strong foundation for the growth of commercial spaces. Tax relief and the urban development fund promise to transform India’s cities into thriving hubs of sustainability and modernity. Moreover, the introduction of a national framework to promote Global Capability Centers will guide states in building the right infrastructure, cultivating a skilled talent pool, and implementing critical by-law reforms. These steps will make Indian cities more attractive to multinational companies.”
Ajendra Singh, Vice-President, Sales and Marketing, at Spectrum@Metro:
“The Union Budget 2025 outlines a transformative vision for India’s commercial real estate sector, with a clear focus on strengthening urban infrastructure. The government’s investments in smarter cities, better connectivity, and sustainability will directly benefit commercial spaces. The reduction in income tax and the establishment of a national framework for Global Capability Centers are poised to drive demand for premium commercial spaces, attracting global businesses and fueling growth in cities across India.”


Manit Sethi, Director, Excentia Infra:
“Budget 2025 underscores the government’s commitment to economic growth and infrastructure enhancements, further supporting the real estate sector. The increase in the TDS threshold limit on rent will ease compliance for those in the affordable and mid-segment rental sector. Meanwhile, the INR 1 lakh crore Urban Challenge Fund will focus on urban redevelopment, transforming cities into dynamic growth hubs. The SWAMIH Fund 2 is another transformative step in addressing India’s housing shortage. Besides, allowing taxpayers to claim the annual value of two self-occupied properties is a major relief for property owners. Further, the change in tax slabs is a welcoming step, making real estate ownership more attractive and easing the tax burden on multiple property owners.”


Ambika Saxena, CEO, TWH Hospitality:
“This year, the government has presented a well-balanced and growth-oriented budget, specifically supporting the tourism and hospitality sectors. The modified Udaan scheme will open doors for the hospitality sector by bringing new tourist destinations into the spotlight. Hotels, resorts, and homestays in unexplored regions will see a surge in demand, encouraging further investment and development. With the government’s push for connectivity and including new 120 destinations, we expect a stronger pipeline in the hospitality sector, catering to both business and leisure travellers in emerging tourism hotspots.”
Umesh Bhati, Director of Operations at Bayside Corporations:
“Budget 2025 lays a comprehensive roadmap for economic expansion, with a clear focus on strengthening domestic manufacturing and enhancing India’s integration into global supply chains. The government’s support for the electronics industry and advancements in automation, AI, and digital technologies will create a demand for specialized commercial real estate in emerging sectors. Furthermore, the proposed national framework for promoting Global Capability Centres in Tier II cities is poised to drive both economic diversification and real estate development in these regions. Combined with continued infrastructure investments, these measures position the real estate sector for robust and sustainable growth across both established and emerging markets.”


Mohit Goel, Managing Director of Omaxe:
“Budget 2025-26 lays a robust foundation for India’s real estate landscape, with a strong focus on infrastructure-led growth and housing affordability. The INR 10 lakh crore asset monetization plan, coupled with the INR 1 lakh crore Urban Challenge Fund, will accelerate urban redevelopment and boost commercial real estate. The expansion of MSME credit will create fresh demand for office spaces, retail hubs, and warehousing. Additionally, the INR 10,000 crore Fund of Funds for Startups and the increase in credit guarantee cover from INR 10 crores to INR 20 crores will empower new businesses. The INR 15,000 crore SWAMIH Fund 2 will fast-track the completion of 1 lakh affordable homes, giving a much-needed push to housing accessibility. With income tax relief and TDS/TCS reforms putting more money in the hands of the middle class, housing demand is set to rise. Furthermore, the introduction of social security measures for gig workers marks a progressive step toward financial inclusion. Collectively, these initiatives position the real estate sector for sustained growth, driving both economic expansion and urban transformation.”


Amrita Gupta, Director of Manglam Group and Founder President of CREDAI Rajasthan Women’s Wing:
“We welcome the Budget 2025-26 for its strategic focus on housing, economic resilience, and tourism-led growth. The INR 15,000 crore SWAMIH Fund 2 will fast-track the completion of 1 lakh stalled housing units, restoring liquidity and boosting homebuyer confidence. Targeted rental housing incentives and self-occupied home tax benefits will further drive demand, particularly among urban and middle-income buyers. The expansion of MSME credit and women-centric entrepreneurship initiatives will enhance financial independence, fostering both homeownership and commercial real estate growth. Additionally, the development of 50 top tourist destinations will unlock vast opportunities in hospitality, retail, and urban infrastructure, reinforcing tourism as a key economic driver. This budget creates a strong foundation for sustained growth across housing, tourism, and allied sectors, making homeownership and investment more accessible than ever.”


Aditya Kushwaha, CEO and Director Axis Ecorp:
“Amid global economic turbulence, India’s luxury real estate sector is not just enduring but thriving, driven by resilience, ambition, and an expanding investor appetite. Budget 2025-26 accelerates this momentum with a sharp focus on urban transformation, backed by the INR 10 lakh crore asset monetization plan and INR 1 lakh crore Urban Challenge Fund. Additionally, the government’s push to develop 50 top tourist destinations will create new demand for luxury hotels, branded residences, and premium retail hubs, reinforcing tourism as a key economic driver. Enhanced foreign investment policies and expanded NRI participation will further unlock capital inflows. With infrastructure-led growth and regulatory ease, the sector is set for sustained expansion.”
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