The Union Budget 2025-26, presented by Finance Minister Nirmala Sitharaman on February 1, introduced significant measures aimed at boosting the real estate sector through housing project support, tax reliefs, and urban infrastructure investments.
The government announced SWAMIH Fund 2, a Rs. 15,000 crores blended finance facility to expedite the completion of one lakh housing units installed projects. This follows the success of the first SWAMIH Fund, which has already delivered 50,000 units, with another 40,000 expected to be completed in 2025.
Tax relief measures were introduced, allowing homeowners to claim tax exemptions on two self-occupied properties without conditions. The annual TDS limit on rental income has been raised from Rs. 2.4 lakh to Rs. 6 lakh, reducing compliance burdens for small landlords.
A Rs. 1 lakh crore Urban Challenge Fund was introduced to support city-level development under initiatives such as "Cities as Growth Hubs" and "Creative Redevelopment of Cities." The fund will cover up to 25% of bankable project costs, with a provision that 50% of funding must come from bonds, bank loans, or PPPs.
Infrastructure development is set to receive a boost with a three-year pipeline of public-private partnership (PPP) projects, while states have been allocated Rs. 1.5 lakh crore in interest-free loans to accelerate capital expenditure and urban expansion.
The government will also launch an Investment Friendliness Index to rank states based on real estate and business investment policies. Additionally, a National Framework for Global Capability Centers (GCCs) will be introduced to promote commercial real estate growth in tier-2 cities, focusing on talent availability, infrastructure improvements, and building-byelaw reforms.
These announcements mark a continued push towards urban development, housing stability, and investment in the real estate sector.