NEW DELHI: Finance minister Nirmala Sitharaman presented the Union Budget 2025-26 on February 1, focusing on economic growth, infrastructure development, and tax reforms. With a strong emphasis on urban infrastructure, housing, and investment, the budget brings several key measures impacting the real estate sector. While there were no direct changes to property tax or home loan benefits, various initiatives aim to support urban development and housing.
Here’s what real estate industry gained in Budget 2025:
Under the Special Window for Affordable and Mid-Income Housing (SWAMIH) 50,000 dwelling units in stressed housing projects have been completed, and keys handed over to home-buyers. Another 40,000 units will be completed in 2025, further helping middle-class families who were paying EMIs on loans taken for apartments, while also paying rent for their current dwellings.
Building on this success, SWAMIH Fund 2 will be established as a blended finance facility with contribution from the Government, banks and private investors. This fund of Rs 15,000 crore will aim for expeditious completion of another one lakh units.
Tax relief for residential property investors
Presently tax-payers can claim the annual value of self-occupied properties as nil only on the fulfilment of certain conditions. Considering the difficulties faced by taxpayers, it is proposed to allow the benefit of two such self-occupied properties without any condition.
Public private partnership in infrastructure
Each infrastructure-related ministry will come up with a 3-year pipeline of projects that can be implemented in PPP mode. States will also be encouraged to do so and can seek support from the IIPDF (India Infrastructure Project Development Fund) scheme to prepare PPP proposals.
Urban sector reforms
Urban sector reforms related to governance, municipal services, urban land, and planning will be incentivized.
The government will set up an Urban Challenge Fund of Rs 1 lakh crore to implement the proposals for ‘Cities as Growth Hubs’, ‘Creative Redevelopment of Cities’ and ‘Water and Sanitation’ announced in the July Budget.
This fund will finance up to 25 per cent of the cost of bankable projects with a stipulation that at least 50 per cent of the cost is funded from bonds, bank loans, and PPPs. An allocation of Rs 10,000 crore is proposed for 2025-26.
Alternate investment funds (AIFs)
Category I and category II AIFs are undertaking investments in infrastructure and other such sectors. I propose to provide certainty of taxation to these entities on the gains from securities.
Live Budget 2025 Blog: What live updates of Budget 2025.
National framework for GCC
A national framework will be formulated as guidance to states for promoting Global Capability Centres in emerging tier 2 cities. This will suggest measures for enhancing availability of talent and infrastructure, building-byelaw reforms, and mechanisms for collaboration with industry.
Extension for incorporation of start-ups
We continue to support the Indian start-up eco-system. I propose to extend the period of incorporation by 5 years to allow the benefit available to start-ups which are incorporated before Apri1 1, 2030.
Support to states for infrastructure
An outlay of Rs 1.5 lakh crore is proposed for the 50-year interest free loans to states for capital expenditure and incentives for reforms.
Investment friendliness index of states
An investment friendliness index of states will be launched in 2025 to further the spirit of competitive cooperative federalism.
