Budget 2026: What tax, GST and credit reforms the industry expects to boost housing momentum

As the countdown to Union Budget 2026 begins, expectations are building across India’s real estate sector for a policy framework that can sustain housing momentum and reflect changing market realities. Finance Minister Nirmala Sitharaman is set to present her ninth Budget on February 1, at a time when the government is under pressure to support domestic consumption amid a slowing global environment.

Economists believe the Centre will seek to build on last year’s tax relief and GST rationalisation to keep household demand steady, even as fiscal space remains tight.

For real estate, the stakes are high. Industry leaders say Budget 2026 could play a decisive role in improving affordability, encouraging reinvestment and unlocking long-term value across residential, commercial and mixed-use developments.

Tax relief

In the premium and luxury housing segment, expectations are centred on easing capital gains rules and improving access to finance. Navdeep Sardana, Founder of Whiteland Corporation, says the market has matured beyond short-term tax sops and now needs structural reforms. He points to the ₹10 crore cap on capital gains reinvestment under Sections 54 and 54F as a key constraint for high-value transactions. “Revisiting this limit would facilitate smoother movement in the ultra-luxury segment,” he says, adding that specialised green financing incentives could accelerate ESG-compliant developments and smart housing technologies. Sardana also expects further rationalisation of TDS norms for NRI investors to attract larger foreign inflows into India’s residential market.

Echoing the need for a broader vision, Sujay Kalele, Founder and CEO of TRU Realty, says real estate is central to India’s $5 trillion economic ambition. He believes Budget 2026 should bridge the gap between “housing for all” and “urban excellence”. While calling for a revision in the affordable housing cap to reflect rising costs, Kalele also urges the government to recognise the premiumisation trend in urban India. “Rationalising capital gains and offering GST incentives for green-certified premium projects can reward the flight to quality that defines a maturing economy,” he says.

Kalele adds that granting industry status to real estate could unlock cheaper credit and support both first-time buyers and aspirational investors.

GST reforms

Taxation and GST reforms are another major area of focus. Tony Vincent, Chairman of Aratt Developers and Ayatana Hospitalities, says the lack of input tax credit for under-construction residential projects continues to push up costs and reduce transparency. Allowing a calibrated input credit mechanism or reworking the GST structure, he argues, could lower prices and improve compliance. Vincent also calls for a relook at capital gains taxation, including shorter holding periods and the return of indexation benefits to help long-term investors manage inflation.

From the home construction segment, Abhijith Ramapriyan, CEO of buildAhome, highlights the need for targeted policy support to offset rising material and labour costs. He says GST rationalisation on construction contracts and materials, along with expanded definitions of affordable housing, could help reduce input costs and widen access to home loans. “Clear incentives for residential development and stronger tax deductions for buyers will send positive signals to both developers and consumers,” he notes.

In high-growth urban markets, expectations are focused on policy continuity and targeted fiscal support. Sidharth Chowdhry, Managing Director of Dalcore, says rationalisation of stamp duty and enhanced tax benefits on home loan interest could significantly boost end-user demand in premium micro-markets such as Gurugram’s Golf Course Road. He also calls for extending infrastructure status benefits and improving access to long-term, low-cost financing to ensure better project execution and investor confidence.

Taken together, the industry’s wish list for Budget 2026 reflects a shift from short-term stimulus to long-horizon reform. From capital gains rationalisation and GST restructuring to green incentives and easier credit, real estate leaders believe the upcoming Budget can lay the foundation for a more transparent, affordable and investment-friendly market—one that supports both India’s urban transformation and its broader economic ambitions.