Here’s a closer look at the expectations and insights shared by industry experts.
Increasing tax deductions on home loans
One of the most anticipated changes is an increase in the tax deduction limit for housing loan interest under Section 24(b) of the Income Tax Act.
Currently capped at ₹2 lakh, there are widespread calls to raise this limit to ₹3–5 lakh.
Rajat Khandelwal, Group CEO at Tribeca Developers, emphasises, “This will make homeownership more accessible and encourage individuals to invest in residential properties.”
An increase in these limits would provide much-needed relief to middle-income homebuyers, enabling them to combat rising property prices and loan interest rates.
Affordable housing: A renewed focus
Sumit Sharma, Founder of Radian Finserv, highlights the need for enhanced support for affordable housing, which has seen a decline post-pandemic.
He notes, “Affordable housing’s share in the market dropped from 38% in 2019 to 21% in first half of 2024. Increasing incentives for first-time homebuyers and providing better financing options could reverse this trend.”
Additional measures like interest subsidies and streamlined access to capital for non-banking financial companies (NBFCs) catering to underserved segments are also on the wish list.
Industry status for real estate
Recognising real estate as an “industry” is a long-standing demand of developers.
Tejas Patil, Founder of Arbour Investments, explains, “This move could streamline access to institutional finance, reduce borrowing costs, and attract domestic and foreign investments.”
Industry status would also simplify regulatory approvals, allowing developers to deliver projects more efficiently and affordably.
Reviving Credit Linked Subsidy Scheme (CLSS)
Rajat Khandelwal also stresses for the revival of the Credit Linked Subsidy Scheme (CLSS) for first-time homebuyers. This initiative could act as a catalyst for the housing sector, providing targeted support to lower-income segments while boosting demand in the mid-range housing market.
GST reforms and infrastructure investments
Mohit Agarwal, Business Head at Conscient, points out the need for reforms in GST rates and regulations.
He suggests reducing the GST on cement from 28% to 18% and allowing input tax credits for under-construction properties.
These changes would benefit both developers and buyers by reducing overall costs.
Infrastructure investments remain a priority for the sector. Increased allocations for urban renewal projects and enhanced connectivity in Tier 2 and Tier 3 cities could unlock new opportunities for development and growth.
Demand from hospitality sector
The hospitality sector, closely linked to real estate, is also pushing for reforms.
Ritwik Khare, Founder and CEO of ELIVAAS, notes, “Comprehensive tax coverage across segments can alleviate financial pressures and make tourism more attractive, fostering both domestic and international travel.”
The hospitality industry, currently valued at $24 billion, is poised for growth fueled by increasing disposable incomes and tourism infrastructure developments.
Khare emphasises the importance of government investments in emerging destinations like Ayodhya and Lakshadweep, which are expected to become popular hotspots in 2025.
He adds, “The sector needs policies that support ventures such as holiday homes and villas, as well as education and training to build a skilled workforce.”
