‘Affordable Housing and Sustainability Eye Key Reforms in Upcoming Union Budget’: NAREDCO Chairman

Dr. Niranjan Hiranandani, Chairman of NAREDCO and a key visionary behind Hiranandani Communities, expressed appreciation to the Finance Ministry for its continued backing of the real estate sector. He underscored the urgent need for increased funding in affordable housing, a segment currently witnessing a downturn.

As the Union Budget approaches on February 1, 2025, the real estate sector has outlined a robust wishlist aimed at accelerating growth and sustainability. Industry leaders have voiced expectations that call on the government to introduce reforms that can ignite investment, bolster housing affordability, and promote inclusive urban development.

Dr. Niranjan Hiranandani, Chairman of NAREDCO, reiterated gratitude toward the Finance Ministry for its ongoing support. He highlighted the necessity of boosting financial support in affordable housing to reverse its negative trajectory. “Strengthening the flow of capital will rejuvenate this crucial sector, advancing inclusivity and sustainable urban transformation,” he noted.

Among the top recommendations is a considerable increase in the home loan interest tax deduction under Section 24(b)—from the current Rs 2 lakh to Rs 5 lakh. Hiranandani emphasized that this shift would improve affordability and spark market demand. NAREDCO also advocates granting infrastructure status to housing to open up new investment channels and ease project execution.

A notable focus has also been placed on rental housing. NAREDCO recommends scrapping notional income tax on unsold inventory classified as stock-in-trade to improve rental availability. Moreover, the organization supports tax exemptions of up to Rs 3 lakh for rental income on homes priced below Rs 50 lakh to incentivize investments in the affordable segment.

Shishir Baijal, Chairman and Managing Director of Knight Frank India, emphasized the ongoing affordability issues for homebuyers despite efforts like PMAY 2.0. He proposed raising the threshold for eligible homes under PMAY in metro areas from Rs 35 lakh to Rs 50 lakh. He also advocated a separate annual deduction of Rs 1.5 lakh for principal repayment under Section 80C to ease financial pressure and encourage borrowing.

Reforms to capital gains tax have also made it to the industry’s budget agenda. Experts recommend extending the completion timeline under Section 54 from three years to five years—considering the complexities in modern housing projects. Additionally, easing the timeline for reinvestment in property post-sale would provide homeowners with more financial flexibility.

When it comes to luxury housing, sustainability and smart investments are in sharp focus. Sandeep Ahuja, Global CEO of Atmosphere Living, highlighted the need for green initiatives, relaxed FDI rules, and faster approval systems to attract domestic and international funding. “Strategic policies can elevate India to a global leader in real estate while advancing sustainability goals,” he asserted.

Venkatesh Gopalakrishnan, CEO of Shapoorji Pallonji Real Estate, expects budget provisions that tackle tax brackets for middle-income groups, price fluctuations in raw materials, and simplified approvals via a single-window system. “A progressive budget will spark innovation, stabilize real estate pricing, and foster long-term development,” he commented.

Siddharth Vasudevan, Managing Director of Vascon Engineers, concurred. He called for reduced stamp duties, lower interest rates on home loans, and the revival of the Credit Linked Subsidy Scheme. “Real estate is pivotal to economic acceleration. Global case studies from cities like Dubai and Singapore prove how enabling policies can fuel national growth,” he pointed out.

Furthermore, industry stakeholders urge the government to promote slum redevelopment projects, especially in urban hubs like Mumbai, to achieve the 'Housing for All' mission within the next five years. Together, these proposals aim to boost affordability, attract investments, and catalyze sustainable urban expansion, strengthening the real estate sector and enhancing national economic resilience.