Christmas Eve Dinner

 Critical Analysis of the Finance Bill 2025 and Its Implications for the Real Estate Sector

Hyderabad, India – The Confederation of Real Estate Developers’ Associations of India (CREDAI) Hyderabad acknowledges the presentation of the Finance Bill 2025. While the government has introduced several provisions aimed at fiscal stability, the budget falls short in recognizing the real estate sector’s crucial role in economic growth and employment generation.

The recently released Economic Survey 2024-25 underscores the significance of the real estate sector, which, along with financial and professional services, contributed nearly 45% to the total services GVA in the first half of FY25. Furthermore, real estate is one of the largest employment

generators in the country, directly and indirectly supporting numerous ancillary industries. Despite these contributions, the Finance Bill 2025 does not adequately address the pressing needs of the

sector.

Key Concerns and Policy Gaps:

1.  Lack of Targeted Tax Incentives: While the retention of current income tax rates is noted, the absence of specific tax incentives for real estate investment is disappointing. Targeted

measures, such as enhanced tax deductions on home loans and reduced GST on construction materials, would have significantly boosted sectoral growth.

2. Insufficient Infrastructure and Housing Support: The allocation of ₹1 lakh crore for urban development is a step forward, but it remains insufficient to address the rising infrastructure demands of an urbanizing India. The housing demand in India is projected to reach 93 million units by 2036, necessitating greater financial support and policy initiatives.

3. Inadequate Funding for Stalled Projects: The ₹15,000 crore allocation under SWAMIH Fund- 2 for completing stalled housing projects is welcome, but it raises concerns about whether

this funding is sufficient to tackle the current backlog.

4.      Affordable Housing and Mortgage Reforms: While the budget includes provisions to support affordable housing, CREDAI Hyderabad urges the government to introduce more

comprehensive policies, including interest subvention schemes and relaxation of mortgage conditions, to make homeownership accessible to a larger population.

5.      Need for Greater Digital and Infrastructure Integration: While the expansion of the Gati Shakti portal for better urban planning is promising, its effectiveness in streamlining approvals and project execution for real estate developers remains to be seen.

6.      Investment in Ancillary Industries: The real estate sector directly impacts numerous ancillary industries, including cement, steel, and construction technology. Policies that support these industries, such as production-linked incentives, can lead to a cascading positive impact on the economy.

7.      Second Property Investment Benefits: The removal of notional rent on second properties is a positive step, but further incentives to encourage investments in rental housing and commercial properties are required to stimulate market demand.

Call for Meaningful Reforms:

CREDAI Hyderabad strongly urges the government to take a more serious approach to real estate

sector reforms, recognizing its pivotal role in achieving India’s ambitious $4 trillion economic target. The anticipated amendments to the Income Tax Act in the coming weeks must address these concerns to unlock the full potential of the sector.

As the voice of the real estate industry, CREDAI Hyderabad will continue to advocate for progressive policies that foster sectoral growth, generate employment, and contribute to national economic expansion. We call upon policymakers to engage in meaningful dialogue with industry stakeholders to ensure the real estate sector receives the attention and support it truly deserves.

As the finance minister has informed us that the final Income Tax Bill will be shared next week, we keenly await its details and hope for favourable provisions that will drive a boom in the real estate sector.