Union Budget 2025: A Catalyst for Real Estate Growth and Economic Prosperity

The Union Budget 2025 has been unveiled, presenting a comprehensive strategy aimed at bolstering key sectors such as agriculture, MSMEs, investment, and exports. This forward-looking blueprint is designed to maintain economic momentum and foster inclusive development across the nation.

Enhancing Tax Benefits for Homeowners and Renters

One of the standout provisions in this year’s budget is the increase in the annual Tax Deducted at Source (TDS) limit on rent from ₹2.40 lakh to ₹6 lakh. This move is set to significantly benefit small taxpayers and landlords by easing compliance burdens. Additionally, the income tax exemption limit under the new regime has been raised to ₹12 lakh, a change that is expected to enhance the spending power of India’s burgeoning middle class and stimulate housing demand.

A particularly noteworthy reform is the amendment allowing taxpayers to claim the annual value of two self-occupied properties as nil, thereby exempting them from notional rental income tax. Previously, homeowners could only claim tax exemption on one self-occupied property, with additional properties being subject to tax even if they were not rented out. This progressive change provides substantial tax relief, encourages homeownership, and acknowledges the evolving housing needs of Indian families.

Boosting the Real Estate Sector with SWAMIH Fund 2

For the real estate sector, especially in the Mumbai Metropolitan Region (MMR), the announcement of SWAMIH Fund 2 with an infusion of ₹15,000 crore is a welcome development. This initiative aims to ensure liquidity for stalled projects and expedite housing deliveries. The completion of 50,000 dwelling units under the existing SWAMIH scheme, with another 40,000 in the pipeline, underscores the government’s strong commitment to resolving the housing crisis.

Increased Support for Affordable Housing

The budget’s increased funding for affordable housing, including the enhancement of the tax deduction limit on home loan interest payments from ₹2 lakh to ₹5 lakh, is a game-changer. This measure is anticipated to significantly improve housing affordability and stimulate market demand, particularly in urban centers like MMR.

Regulatory Reforms and Infrastructure Development

Regulatory reforms under the Real Estate (Regulation and Development) Act (RERA) and the Goods and Services Tax (GST) have already brought much-needed transparency and efficiency to the sector. As of January 2025, 1.38 lakh real estate projects and nearly 96,000 agents have been registered under RERA, reflecting the sector’s commitment to compliance and accountability.

Furthermore, the government’s continued commitment to infrastructure development under the National Infrastructure Pipeline (NIP) and enhanced urban infrastructure policies will provide a strong foundation for real estate growth. Investments in roads, highways, energy, and transportation are not only expected to improve connectivity but also create jobs and fuel economic expansion.

Industry Leaders Applaud Growth-Centric Measures

Industry leaders have lauded these growth-centric measures. Domnic Romell, President of CREDAI-MCHI, remarked, “The Union Budget 2025 is a forward-looking blueprint that effectively touches upon key engines of development—agriculture, MSME, investment, and exports—ensuring sustained economic momentum. The government’s commitment to accelerating growth towards Viksit Bharat, securing inclusive development, and uplifting household sentiments is commendable.”

He further added, “We appreciate these growth-centric measures and look forward to further structural reforms, including the rationalization of GST and input tax credit for real estate, to unlock the sector’s full potential and drive urban transformation.”

Conclusion

In summary, the Union Budget 2025 introduces a series of strategic initiatives aimed at stimulating economic growth and supporting the real estate sector. Through enhanced tax benefits, increased funding for affordable housing, and a steadfast commitment to infrastructure development, the government is paving the way for a more prosperous and inclusive future.