Budget 2025: Rs 15,000 cr Fund for Stalled Projects, But Real Estate Sector Seeks More

New Delhi, Feb 1 (PTI) Realtors' apex bodies CREDAI and NAREDCO on Saturday said the industry was expecting a lot from the Union Budget including, a hike in exemption on interest paid on home loans and sops to boost affordable housing segment, even as the two associations hailed the move to set up Rs 15,000 crore fund to complete stalled housing projects.

CREDAI National President Boman Irani said the exemption of income tax payable for income up to Rs 12 lakh, coupled with increasing the TDS threshold on rent from Rs 2.4 lakh to Rs 6 lakh, will significantly enhance disposable income, boosting housing demand and overall consumption.

G Hari Babu, National President of NAREDCO, said the decision to exempt income up to Rs 12 lakh from taxation under the new regime is a significant incentive for the middle-income group, making homeownership more accessible and encouraging investment in the housing sector.

However, both Irani and Hari Babu felt that the Budget could have done more for the real estate sector, especially the affordable housing segment.

"This Budget supports economic stability and positive market sentiment. However, the sector was expecting additional measures, such as further incentives to boost demand for affordable housing, a higher threshold for home loan interest exemptions which has remained stagnant for a long time," Irani of CREDAI said.

The industry was also seeking a revision in the definition of affordable housing based on a minimum dwelling unit size instead of a uniform Rs 45 lakh value across the country.

"These steps could have provided an added stimulus to the market and improved housing affordability," Irani said.

He said the Rs 15,000 crore SWAMIH Fund 2 is a crucial step towards expediting stalled housing projects, ensuring homebuyers' interests are safeguarded.

Additionally, allowing benefits for two self-occupied properties without conditions will further boost homeownership.

Hari Babu of NAREDCO said the government has made a good move with SWAMIH Fund 2, with an additional Rs 15,000 crore earmarked for the completion of housing projects that were previously stuck due to financial distress.

This move directly benefits middle-class families, many of whom are juggling EMIs for home loans while also paying rent for alternative accommodation, he said.

"However, the Budget 2025 could have also addressed some crucial areas, particularly the affordable housing segment. Rising home loan interest rates and the outdated definition of affordable housing have created barriers for many potential homeowners," the NAREDCO President said.

Samir Jasuja, Founder and CEO of PropEquity, said the SWAMIH Fund 2 with an allocation of Rs 15,000 crore is a small yet welcome move considering that the government is targeting to complete 1 lakh units.

According to PropEquity, close to 2,000 housing projects across 42 cities comprising 5.08 lakh units have been stalled.