Union Budget 2025 Eases Tax Burden, Boosts Housing Market Growth by Mr. Kaushal Agarwal, Chairman at The Guardians Real Estate Advisory
Below the Quote on Union Budget 2025 Eases Tax Burden, Boosts Housing Market Growth by Mr. Kaushal Agarwal, Chairman at The Guardians Real Estate Advisory
Homeownership is often seen as a symbol of security and a stable future. However, rising property costs, variable mortgage rates, and the burden of taxes have made achieving this aim impossible for many. With its substantial changes to income taxes, the Union Budget 2025 gives prospective homeowners new hope. These improvements aim to alleviate financial difficulties, making homeownership more accessible and attainable to a larger portion of the population.
At the heart of these reforms is the increase in the income tax exemption limit to Rs.12 lakh (Rs.12.75 lakh with standard deductions). This change directly boosts disposable income, allowing individuals to allocate more towards home-related expenses, such as loan EMIs or down payments. The revised tax slabs could potentially lead to monthly savings of up to Rs.10,000, significantly enhancing affordability. The budget also eliminates tax on notional rental income from a second self-occupied property. Previously, homeowners with more than one property had to account for rental income, even if the property remained unoccupied. With this removal, investing in second properties becomes more attractive and encourages increased investment in real estate.
The budget also increases the tax deduction at source (TDS) threshold on rental income from Rs.2.40 lakh to Rs.6 lakh per year. This minimises landlords' compliance obligations, making rental housing a more desirable investment. Similarly, senior citizens who rely on fixed incomes will benefit from an increase in the tax deduction limit for interest income, as well as the relief of not having to file tax returns if they rely only on pensions and interest income. This could inspire retirees to invest in homes, notably senior living facilities, which are in high demand.
Likewise, the government's grant of Rs.15,000 crore to the Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund 2 addresses one of the housing sector's most pressing concerns i.e. stalled projects. This fund seeks to complete one lakh housing units, giving the market a much-needed boost and instilling trust among buyers. These tax cuts are expected to boost demand for housing, resulting in increased property values. As purchasing power
rises, developers will be driven to create new projects to fulfil demand, resulting in better products, more competitive pricing, and improved amenities. A thriving real estate sector also supports construction-related companies, which helps to create jobs and boosts general economic growth.
However, certain aspects of the budget could have been more impactful. Recognising the real estate sector as an essential industry, for instance, could have unlocked regulatory benefits and improved financing options for developers. Additionally, stamp duty reforms and targeted incentives for first-time homebuyers were not included, and non-resident Indians (NRIs), a major contributor to real estate investments, did not receive specific incentives to encourage participation. Despite these gaps, the tax reforms outlined in the budget are a promising step in the right direction. The success of these measures will depend on their effective implementation and the broader economic environment. If managed well, these changes could reshape the housing market, making homeownership more achievable for a larger segment of the population.
Though there are still a few things that can be improved, the 2025 budget has laid the groundwork for a housing market that is more accessible and vibrant. The dream of homeownership for many will likely become a tangible reality in the future if future policies address the gaps and further incentivise the real estate sector.
Above views are of the author and not of the website kindly read disclaimer
