Published On:
February 10, 2026
Updated On:
February 10, 2026
The Union Budget 2026-27 has left the real estate sector with mixed feelings. While structural reforms like the Single Window Clearance system and simplified NRI property rules are welcome, the industry’s core demands—raising the ₹2 lakh home loan interest deduction and redefining "affordable housing"—remain unaddressed, leaving stakeholders still waiting for "real" reform.
The dust has settled on the Union Budget 2026-27, and the verdict from India’s real estate sector is clear: it is a budget of "continuity" rather than "catalysis." For an industry that contributes nearly 8% to the nation's GDP and is the second-largest employer after agriculture, the expectations were sky-high. Developers and homebuyers alike were hoping for a stimulus package that would revive the sluggish affordable housing segment and provide relief from soaring property prices.
However, as the fine print is analyzed, it appears that while the Finance Minister has offered some targeted relaxations—particularly in "ease of doing business"—the heavy lifting required to boost demand has been deferred. The sector, which has demonstrated remarkable resilience post-pandemic, finds itself once again in a waiting game for the "real" reforms that could unlock its full potential.
To understand the industry's sentiment, one must look at the wishlist that went unanswered. These weren't just demands for handouts but structural requests to align policy with current market realities.
The biggest disappointment for the common homebuyer is the lack of change in Section 24(b) of the Income Tax Act. The deduction limit for interest on home loans has remained capped at ₹2 lakh for over a decade.
The definition of "affordable housing" remains pegged at a price cap of ₹45 lakh.
For years, the sector has demanded "Industry Status" to access cheaper credit from financial institutions. Once again, this demand was bypassed. This means developers will continue to rely on high-cost borrowing, the burden of which is ultimately passed on to the homebuyer in the form of higher property prices.
It wasn't all gloom, however. The government introduced several strategic measures that, while not headline-grabbing "sops," will fundamentally improve the ecosystem in the long run.
One of the most significant, albeit technical, victories is the push for a digitized Single Window Clearance system.
The budget has simplified life for Non-Resident Indians (NRIs) looking to invest in their homeland.
Budget 2026 clarified a long-standing ambiguity regarding tax deductions for under-construction properties. It is now explicitly clear that pre-construction interest can be claimed in five equal installments after possession, but it must still fall within the overall ₹2 lakh limit of Section 24(b). While this doesn't increase the benefit, it eliminates litigation risks and confusion for taxpayers.
While direct real estate benefits were muted, the government’s continued aggressive capex on infrastructure—highways, metro corridors, and City Economic Regions—is a silver lining.
The Budget 2026-27 can be best described as a "maintenance budget" for real estate—it fixes some leaks (compliance, digitization) but doesn't upgrade the engine. The focus has clearly shifted from demand-side stimulus (tax breaks) to supply-side efficiency (ease of doing business).
For the homebuyer, the message is clear: do not wait for policy miracles. Prices are unlikely to correct significantly, and tax breaks are stagnant. However, with improved transparency and faster project deliveries on the horizon, the market is safer than before. For the sector to truly thrive and meet the housing needs of a growing population, the government may eventually have to bite the bullet and introduce the "real reforms" of industry status and tax rationalization that remain on the wishlist. Until then, the sector waits.
