Union Budget 25-26: Key Announcements Impacting The Real Estate Sector

Anuj Puri

The Union Budget 2026 focuses on economic expansion, infrastructure, MSMEs, futuristic cities, and middle-class welfare. It aims to boost rural consumption and unlock India’s economic potential.

From a real estate perspective, the budget offers both direct and indirect benefits. It acts as a catalyst for growth. However, major announcements for affordable housing were limited, leaving some stakeholders disappointed. Overall, the budget remains strong, growth-oriented, and investment-friendly.

Key Real Estate Highlights

Income Tax Relief for Middle Class:
Individuals earning up to INR 12 lakh annually will pay zero income tax. This boosts consumption and strengthens housing demand. Personal tax reforms and simplified TDS/TCS will reduce compliance hassles.

Tax Benefits for Residential Property Investors:
Homeowners can now claim two self-occupied properties as tax-free, up from one. This encourages homeownership, rental housing investment, and real estate purchases in Tier 2 and Tier 3 cities. Simplified TDS on rent enhances liquidity for landlords.

INR 1 Lakh Crore Urban Challenge Fund:
The fund will develop new-age cities, improve infrastructure, and unlock real estate potential in urban hubs.

SWAMIH Fund – INR 15,000 Crore:
Over 1 lakh stalled residential units will be completed, providing relief to homebuyers, particularly in NCR.

Revamped UDAAN Scheme:
The scheme will connect 120 new destinations and serve over 4 crore passengers. Greenfield airports will support Tier-II and Tier-III city growth, boosting local real estate demand.

PM Gati Shakti Data & Tourism Infrastructure:
Private sector access to PM Gati Shakti data, plus 50 tourist destinations development, will create real estate opportunities. Hotels and warehousing infrastructure will also benefit.

Support for Global Capability Centres (GCCs):
A national guidance framework will attract GCCs, fueling office space demand in metros and Tier-II/Tier-III cities.

MSME Fiscal Support – INR 1.5 Lakh Crore:
Capacity expansion in MSMEs will create ripple effects, positively impacting industrial real estate.

Conclusion:
The Union Budget 2026 is pro-growth and infrastructure-driven. Middle-class relief, urban development, connectivity, and investment-friendly policies are expected to stimulate real estate demand across segments. While affordable housing gains were limited, overall, the budget lays the foundation for a stronger real estate market.

Anuj Puri is Chairman, ANAROCK Group