Budget 2026 Wish List For The Real Estate Sector: Bigger Tax Breaks, Cheaper Homes & Faster Project Approvals

The real estate sector of India approaches the Union Budget 2026 with a positive but cautious attitude and a request for policy measures that would keep up the current upswing and, at the same time, solve the problem of affordability for a larger group of buyers.

The real estate sector is talking about this year's budget as a great chance to come up with a new definition of housing, to get more tax breaks, and to have the government give the infrastructure sector enough support to keep up with the growth of the cities.

Real estate has come a long way from the post-pandemic recovery phase and has now entered a more structural growth phase, which is characterized by the demand of end-users and the gradual maturity of the real estate regulations. The volume of sales in the major cities has reached pre-COVID levels and even gone above them, but the situation is still difficult in terms of affordability in big metros and even in some Tier II cities, where the cost of land and construction is still on the rise.

The voice has now changed from that of cyclical revival to that of long-term reshaping, with housing being increasingly considered as an asset with potential for both stability and price inflation. Thus, the 2026 Budget is not viewed as a mere emergency relief but rather a recalibration of the policy frameworks to meet the current market conditions and realities.

Affordable housing recalibration

The definition of affordable housing is being reconsidered by industry leaders, who say that the current limit of Rs 45 lakh does not represent the price levels in most urban areas. CREDAI and other organizations propose to increase this limit to Rs 80-90 lakh with variations per city that would more accurately target Economically Weaker Sections (EWS), Low-Income Groups (LIG), and lower mid-segment buyers.

Similar expectations focus on the advancement of Pradhan Mantri Awas Yojana (PMAY) 2.0 with increased funding and quicker application procedures, which would be a continuation of its outreach to the extra 3 crore households. This could create opportunities in regions that have traditionally been deprived of housing at lower prices while also enabling developers to continue their projects.

Tax and credit expectations

Section 80EEA continues to be the main point of discussion, as it provides a maximum of Rs 1.5 lakh additional interest deduction for loans pertaining to affordable housing loans, but is restricted by the time-limited applicability and outdated property value caps. The parties involved are requesting an extension, relaxed thresholds, and possibly higher deduction limits to significantly help first-time buyers who are facing increased EMIs.

Another major component of the sector's request for improvement is the GST exemption on under-construction properties and raw materials, which will allow the sector to increase its profits without raising prices to the end-users. The credit side of the industry expects financial institutions to introduce interest grants, provide better guarantees, and open up more funding channels in order to maintain a steady flow of projects.

Infrastructure as a growth multiplier

Urban connectivity projects—metros, ring roads, logistics parks, and smart cities—form the sector's broader wishlist, creating liveable micro-markets that attract both residents and institutional capital. Single Window Clearances and RERA enhancements are also expected to accelerate timelines, complementing financial incentives with operational efficiency.

Anurag Goel, Director, Goel Ganga Developments, articulates this comprehensive vision: "The real estate sector is really hoping that the upcoming Budget 2026 will confirm the government's promise to expand both housing and infrastructure. Policy measures such as the expansion of Section 80EEA benefits, the flow of credit being made easier through lower interest subvention, and the widening of the definition of affordable housing could be the demand reinvigoration measures."

In the same way, a continuous push on urban infrastructure, logistics parks, and smart city projects will not only create job opportunities but also attract institutional investment. Besides that, developers are anticipating that the budget allocations for Pradhan Mantri Awas Yojana and Single Window Clearances to accelerate project timelines will be increased. This Budget can very well be the turning point towards a sustainable future by connecting the dots between housing supply and India's urban population's rising aspirations.

Investor stability narrative

Among the factors that make real estate attractive, one of the most important is its dual promise of income and capital gains.

With this viewpoint, Keshav Mangla, GM Business Development at Forteasia Realty, says, "The real estate sector is sure that the new Budget 2026 would be a confirmation of the state's backing for the housing and infrastructure sectors. Among the policies that may find their way back into the property market is the widening of the Section 80EEA eligibility criteria, making access to credit easier through interest subsidy, and the extended definition of the so-called affordable housing, which is going to change the demand stream. The government's unremitting support for urban infrastructure, logistics parks, and smart city projects will not only generate new employment but also attract institutional investors into the market."

Developers are also anticipating an increase in the budgetary allocation for the Pradhan Mantri Awas Yojana and the provision of Single Window Clearances that would assist in speeding up the project timelines. This budget can be the driving force behind sustainable development, which would slowly achieve a balance between the housing supply and the urban aspirations of the Indian population.

The measures and investments of Budget 2026 will mark the beginning of a new era for the real estate sector, where it will take the government's support through proper urban planning to grow resolutely and equitably.