Budget 2025 Transforms Real Estate Sector India

The Union Budget 2025-26, presented by Finance Minister Nirmala Sitharaman, introduces key initiatives set to revolutionize urban development, infrastructure, and housing affordability. Industry leaders hail this budget as a "game-changer," anticipating a massive boost in real estate investments, job creation, and economic growth.

Infrastructure Push to Drive Housing Demand

According to Ramani Sastri, Chairman & MD of Sterling Developers, the government's strong focus on infrastructure will significantly enhance housing demand, benefiting over 250 ancillary industries and generating numerous employment opportunities.

A major highlight of this budget is the India Infrastructure Fund, coupled with a renewed emphasis on Public-Private Partnerships (PPPs). This initiative is expected to accelerate urban development and attract long-term real estate investments.

Urban Challenge Fund & SWAMIH Fund 2: A Boost for Cities

The launch of the Urban Challenge Fund worth ₹1 lakh crore will further fuel the redevelopment of urban and semi-urban areas, making them more attractive for residential and commercial real estate growth.

Additionally, the introduction of SWAMIH Fund 2 is expected to address the long-standing issue of stalled housing projects, ensuring their completion and increasing liquidity in the real estate market.

Tax Reforms to Benefit Homebuyers

The budget introduces a major tax relief for homeowners by allowing taxpayers to claim the annual value of two self-occupied properties as zero. Previously, only one self-occupied property was exempt from notional rent taxation.

This change is set to:

• Reduce tax burdens
• Encourage homeownership
• Improve housing affordability for middle-class families

However, Sastri believes that first-time homebuyers could have benefited from additional tax relief measures to further boost the sector.

Coworking and Commercial Real Estate Poised for Growth

Manas Mehrotra, Founder of 315Work Avenue, highlights how the budget’s focus on making cities high-growth hubs will provide a major boost to commercial real estate.

With corporates and multinational companies expanding office spaces in major metros, the coworking sector is expected to see a significant rise in demand. Moreover, the government's push for Global Capacity Centres (GCCs) in Tier-2 cities will further attract real estate investments in these regions.

The ₹10,000 crore Fund of Funds for Startups (FFS) is another crucial step that will strengthen India’s startup ecosystem, subsequently driving demand for coworking spaces—essential hubs of innovation and entrepreneurship.

GCC Expansion: A Strategic Shift in India’s Tech Landscape

According to Lalit Ahuja, CEO of ANSR, the budget’s framework to expand Global Capability Centres (GCCs) into Tier-2 cities marks a strategic shift in India’s technology and real estate landscape.

With nearly 80% of global companies yet to establish GCCs in India, this move unlocks immense potential to position India as the GCC capital of the world, while simultaneously creating millions of skilled jobs in emerging cities.

A Promising Future for India’s Real Estate Market

With strong policy reforms, infrastructure investments, and tax benefits, Budget 2025 sets the foundation for a dynamic and investment-friendly real estate sector. The focus on homeownership, commercial real estate, and tech-driven urban growth will drive a new era of development, making India an attractive destination for real estate investments.