The Union Budget 2025 brings with it a few measures that are likely to impact India’s real estate industry heavily. The reduction in personal income tax rates by the government is likely to raise disposable income, which could translate into higher housing demand, especially from the middle class.

To ease compliance costs in the rental sector, the Tax Deducted at Source (TDS) limit on rental income has been increased from ₹2.4 lakh to ₹6 lakh per year. This change makes it easier for landlords and tenants, promoting rental housing investment growth.

Pertaining to the stuck housing developments, the budget provides ₹15,000 crore to commence the second Special Window for Affordable and Mid-Income Housing (SWAMIH) fund. It is set to finish about 100,000 stuck units, improving consumer confidence and accelerating the affordable housing space.

In addition, the budget allows taxpayers to treat two self-occupied houses as tax-free, exempting the tax burden on notional rental income of a second house. This move promotes investment in more than one property, benefiting homeowners and the residential real estate sector.

Moreover, the Reserve Bank of India’s recent 25 basis points cut in the repo rate to 6.25% is intended to spur economic growth. This action is expected to make home loans cheaper, further increasing housing demand.

Together, these actions are intended to spur growth and stability in India’s real estate market by making it more affordable, simplifying compliance, and resolving project completion issues.