As Finance Minister Nirmala Sitharaman gears up to present the Union Budget 2025 on February 1, homebuyers are hopeful for reforms that enhance affordability, streamline regulations, and uplift real estate market sentiment. High interest rates and taxation continue to put financial pressure while rising inflation has dampened demand in the mid and affordable housing segments. This budget offers a crucial opportunity for both existing and prospective homebuyers seeking financial relief.
Similarly, the real estate industry experts believe that well-planned policy measures could offer significant support to middle-class homebuyers while providing growth to the real estate sector.
Key Expectations from Budget 2025
Homebuyers hope that this budget will introduce measures to streamline financing, reduce tax burdens, and improve accessibility for affordable housing. Some of the top policy considerations include:
* Affordable Housing and Simplification of GST
Strengthening initiatives like the Pradhan Mantri Awas Yojana (PMAY-U) with higher budgetary allocations and extending the loan-linked subsidy would promote homeownership and benefit first-time buyers. The current Goods and Services Tax (GST) framework poses challenges for developers due to ambiguities. A more streamlined and transparent tax structure could reduce financial strain and encourage smoother transactions for under-construction properties.
Also Read: Budget 2025: Higher exemptions to revamped 80C, here’s what taxpayers expect from FM
* Stamp Duty Rationalisation
Homebuyers in some states face stamp duties as high as 8-9%, significantly increasing property costs. A uniform and reduced rate, particularly for homes priced up to Rs 1.50 crore, would make housing more affordable and stimulate demand.
* Enhancing REITs and InvITs
Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) have improved sectoral transparency and liquidity. Reducing the Dividend Distribution Tax (DDT) and offering additional incentives to retail investors could further drive their adoption.
* Boost for Rental Housing
Rental housing in metro cities continues to be expensive and unaffordable. A large number of migrants are not able to afford rental housing close to their workplace. They live far from the main city centres and have to spend more time and money to reach their offices. Affordable rental housing could provide relief to these migrants who cannot purchase houses right away. With urban housing shortages on the rise, incentives and policy support for rental housing development could address accommodation needs while promoting workforce mobility.
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