Budget 2026 Wishlist: NAREDCO Pushes for Bigger Affordable Housing Cap
As India prepares for Budget 2026, the real estate sector is making its voice heard. The National Real Estate Development Council (NAREDCO) has called on the government to revise the definition of affordable housing. At present, homes priced up to ₹45 lakh qualify as affordable. NAREDCO suggests increasing this ceiling to ₹75–80 lakh.
NAREDCO believes this move could widen access to affordable housing for a larger section of the population. It could also stimulate demand in a sector that is crucial for India’s economy.
Higher Home Loan Interest Deduction to Boost Demand
Along with redefining affordable housing, NAREDCO recommends increasing the deduction limit on home loan interest. Currently, homeowners can claim up to ₹2 lakh for self-occupied properties. NAREDCO urges the government to raise this limit to ₹5 lakh.
This step could make home ownership more attainable. It could also provide a direct boost to the real estate market by encouraging more people to invest in homes.
Affordable Housing Needs Government Support
Speaking at an event in Delhi, NAREDCO Chairman Niranjan Hiranandani emphasized the need to give affordable housing the same importance as other infrastructure sectors. He suggested that the government should use its own land for developing affordable and mid-income housing.
Hiranandani said, “We need to ensure Housing For All. Housing should get priority like any other critical infrastructure sector.” This statement highlights the growing recognition of real estate as a backbone of urban development.
Incentives for Rental Housing
NAREDCO has also urged the government to promote rental housing. Rental yields in India remain low, around 1–3%, making such projects less profitable for developers. To overcome this challenge, the association recommends tax incentives and supportive policies.
Parveen Jain, NAREDCO President, stressed that incentivizing rental housing could encourage developers to invest and scale projects. By doing so, the government could address India’s rising urban rental demand while also creating more business opportunities in real estate.
Industry Status for Real Estate Sector
The association has long demanded industry status for real estate. Currently, the sector lacks certain financial benefits that other industries enjoy. If granted industry status, developers could access cheaper financing for land and construction materials, lowering costs and boosting growth.
Jain pointed out that considering the sector’s contribution to India’s GDP and employment, it is high time the government officially recognizes real estate as an industry. With the sector estimated to reach $1 trillion by 2030, formal recognition could accelerate investment and development.
How These Changes Could Transform the Market
Raising the affordable housing cap, increasing home loan deductions, promoting rental housing, and granting industry status could collectively transform India’s real estate landscape.
- More people could afford homes in urban centers.
- Rental housing supply could increase, improving availability for tenants.
- Developers could reduce costs and scale projects faster.
- The sector could generate more jobs, supporting overall economic growth.
These measures would align with India’s goal of Housing For All, making urban living more inclusive and sustainable.
Sanjeev Singh, MD SKJ Landbase, Weighs In
Commenting on NAREDCO’s recommendations, Sanjeev Singh, MD of SKJ Landbase, said:
These proposals are timely and necessary. Expanding affordable housing and promoting rental projects will not only benefit homebuyers but also create a healthier ecosystem for developers. Government support in the form of tax incentives and industry recognition can accelerate growth and make housing more accessible to millions.
His statement reflects the industry’s optimism that Budget 2026 could unlock new opportunities for both developers and homebuyers.
Why Budget 2026 Matters for Real Estate
The real estate sector is a key driver of India’s economy. It contributes significantly to employment, GDP, and urban development. By revisiting affordable housing definitions, supporting rental housing, and offering financial incentives, the government could boost this critical sector.
As the market evolves, developers, homebuyers, and investors all stand to benefit. Affordable housing would reach more people. Rental housing could become viable for developers. And industry status could unlock cheaper financing, making projects more profitable.
In short, Budget 2026 could mark a turning point for Indian real estate, making homes more accessible and the sector more vibrant.
Conclusion
NAREDCO’s recommendations for Budget 2026 focus on increasing affordability, boosting rental housing, and recognizing real estate as a formal industry. Together, these measures could drive growth, support employment, and bring India closer to its Housing For All goal.
With government backing, developers and others could accelerate projects, making quality housing accessible to a wider audience. For homebuyers, higher deduction limits and expanded affordable housing definitions could mean dream homes becoming a reality.
Budget 2026 is shaping up to be a game-changer for the real estate sector. Stakeholders are hopeful that the government will take bold steps to support both developers and buyers, creating a thriving housing ecosystem for years to come.
