The Union Budget 2025-26, presented by Finance Minister Nirmala Sitharaman, has introduced significant measures aimed at revitalizing the real estate sector. Key announcements include the introduction of SWAMIH Fund 2 to expedite stalled housing projects, tax exemptions for self-occupied properties, and broader fiscal incentives that could stimulate housing demand.
Key Highlights Impacting Real Estate:
1. Annual Value of Self-Occupied Property Set to Nil
In a move to simplify property taxation, the Finance Minister announced that the annual value of a house property will be considered nil if the owner resides in it or is unable to occupy it due to unavoidable reasons. This change provides financial relief to homeowners who previously had to account for notional rent on multiple properties.
2. Expansion of SWAMIH Fund for Stalled Projects
The Special Window for Affordable and Mid-Income Housing (SWAMIH) initiative has successfully completed 50,000 units, delivering much-needed relief to homebuyers stuck in delayed projects. Building on this success, another 40,000 units are set to be completed in 2025. Furthermore, the government has announced SWAMIH Fund 2, with a Rs 15,000 crore corpus, aimed at expediting the construction of an additional one lakh units. This move is expected to alleviate financial stress in the housing market and aid homebuyers facing dual financial burdens of EMIs and rent.
3. Increase in Income Tax Exemption to Rs 12 Lakh
The budget introduces a tax exemption limit of Rs 12 lakh, significantly boosting disposable income for middle-class families. This change is expected to enhance home affordability and drive demand, particularly in the affordable and mid-segment housing categories.
4. Urban Challenge Fund to Strengthen Infrastructure
A new Rs 1 lakh crore Urban Challenge Fund has been introduced to support sustainable urban development. The fund will promote structured public-private partnerships (PPP) to transform Indian cities into modern, well-planned hubs, ultimately benefiting the real estate sector through improved infrastructure and connectivity.
5. Digital Transformation in Real Estate
The government’s push towards digitalization in real estate transactions aims to streamline property dealings, ensuring greater transparency and efficiency for homebuyers, investors, and developers.
Industry Experts React to Budget Announcements
Industry leaders have largely welcomed the budget, calling it a transformative step for real estate and infrastructure development:
- Pradeep Aggarwal, Chairman, Signature Global (India) Ltd., lauded the SWAMIH Fund 2 and Urban Challenge Fund as game-changers for affordable housing and urban transformation.
- Ritesh Mastipuram, Founder & MD, Ridhira Group, highlighted the significance of digital reforms in enhancing real estate transparency.
- Mohit Malhotra, Founder & CEO, NeoLiv, emphasized how PMAY-U 2.0, launched in September 2024, will further support affordable housing with an additional one crore homes.
- Kaushik Desai, Managing Partner, WSB Real Estate Partners, appreciated the infrastructure push but pointed out that further incentives for first-time homebuyers could have stimulated demand more effectively.
- Sanjay Chatrath, Co-founder & Managing Partner, Incuspaze, commended the government’s investor-friendly approach, particularly the ease of doing business reforms and taxation policies.
Impact on Noida’s Real Estate Market
For a rapidly developing city like Noida, these measures are expected to:
- Accelerate the completion of stalled housing projects.
- Boost demand for affordable and mid-income 3BHK properties, aligning with market preferences.
- Enhance infrastructure through improved urban planning and connectivity.
- Create better investment opportunities for both domestic and global investors.
Conclusion
The Union Budget 2025-26 has laid a strong foundation for real estate growth through tax benefits, infrastructure spending, and financing support for delayed projects. The initiatives announced are set to increase homebuyer confidence, attract investment, and enhance urban development, making it an overall positive budget for the real estate sector.
