From affordable housing to AIF incentives: real estate’s wishlist for Budget 2026

As expectations build around Union Budget 2026, the real estate sector is looking for policy continuity and targeted reforms to sustain its recent momentum and address long-standing structural challenges.

Industry leaders believe that with the right mix of demand-side incentives, regulatory easing, and infrastructure push, real estate can play an even bigger role in India’s economic growth story.

Ramani Sastri, Chairman and Managing Director of Sterling Developers Pvt. Ltd, notes that Indian real estate has shown remarkable resilience in recent years, supported by strong demand, rising aspirations, and government-led initiatives. However, affordability remains a key hurdle for a large segment of homebuyers.


He believes expanding the definition of affordable housing in urban areas could significantly boost end-user demand, especially as residential real estate continues to be seen as a long-term investment.

Sastri also makes a case for interest subsidies for first-time homebuyers who currently fall outside existing benefit structures, alongside an increase in the home loan interest deduction limit to encourage housing purchases.

From the developer’s perspective, quicker approvals and rationalisation of GST on under-construction homes are seen as crucial to reducing project delays and improving execution efficiency.

Sastri further highlights that granting industry status to real estate could unlock affordable funding and simplify regulatory processes, while continued infrastructure development would support housing demand across regions.

According to him, a growth-oriented Budget could have multiplier effects across nearly 250 allied industries, driving employment and economic activity.

Echoing the need for stability and long-term planning, Anil Mittal, Chief Financial Officer of Smartworld Developers, stresses the importance of consistent taxation policies, expanded institutional financing, and streamlined regulations, particularly for the luxury and branded residential segments.

He believes sustained investment in urban infrastructure, mass mobility, and integrated city planning is essential, as connectivity and civic amenities directly influence the attractiveness of premium developments.

Measures that promote formalisation and reduce compliance burdens, he adds, will help the sector mature further and reinforce investor confidence.

Institutional Capital in Real Estate:

Institutional capital is another key theme emerging ahead of the Budget. Ankur Jalan, CEO of Golden Growth Fund (GGF), a category II real estate-focused AIF, points out that established urban markets such as Delhi, Mumbai, and Bengaluru would benefit from stronger demand-side support and continued infrastructure investments, especially in urban transport and last-mile connectivity.

He also advocates enhanced incentives for Alternative Investment Funds to encourage more institutional participation in real estate, making investments more regulated, transparent, and scalable.

Also read: Budget 2026: How India introduced, scrapped and raised capital gains taxes for stock market investors

Overall, industry stakeholders are hopeful that Budget 2026 will strike a balance between growth and stability—supporting homebuyers, easing operational challenges for developers, and attracting long-term institutional capital.

Such a calibrated approach, they believe, would not only strengthen confidence across the value chain but also reinforce real estate’s role as a key contributor to employment, capital formation, and India’s urban future.

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)