Buying or Selling Property in 2025? The Budget’s Impact Explained
The Union Budget 2025 is set to positively impact the real estate market in India through tax incentives, infrastructure development, and targeted fund allocations. With the sector contributing 7% to the nation's GDP, recent growth in both residential properties and commercial real estate highlights its importance in India's journey towards a $7 trillion economy.
Key Tax Incentives
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Tax Relief for Middle Class: Individuals earning up to ₹12 lakh annually will not have to pay income tax, increasing disposable income and potential property investment.
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Tax Benefits for Homeowners: Investors can now claim nil valuation for two self-occupied properties, making homeownership more attractive in the property business.
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Higher TDS Limit on Rental Income: The annual TDS limit on rental income has been increased from ₹2.4 lakh to ₹6 lakh, reducing compliance burdens and encouraging more rental housing development in the real estate market.
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Senior Citizen Benefits: The limit for tax deduction on interest income for senior citizens has been doubled from ₹50,000 to ₹1 lakh.
Infrastructure Development & Real Estate Growth
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Urban Challenge Fund: A new ₹1 lakh crore fund has been introduced to enhance urban infrastructure and unlock real estate market potential.
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India Infrastructure Fund: This fund aims to support large-scale infrastructure projects that will drive long-term property investment and development.
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UDAAN Scheme: The scheme plans to connect 120 new destinations and serve over four crore passengers in the next decade, boosting real estate development around emerging travel hubs and enhancing the selling property landscape.
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PPP Project Pipeline: A three-year Public-Private Partnership (PPP) project pipeline will accelerate infrastructure projects, further strengthening urban growth and commercial real estate expansion.
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Interest-Free Loans to States: INR 1.5 lakh crore has been allocated for 50-year interest-free loans to states, ensuring continued regional development.
Boost to Affordable Housing & Commercial Real Estate
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SWAMIH Fund Expansion: A second Special Window for Affordable and Mid-Income Housing (SWAMIH) fund with INR 15,000 crore has been announced to resolve project delays and inject fresh capital into stalled residential properties.
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Growth of Global Capability Centers (GCCs): India currently has 1,700 GCCs, with projections of reaching 2,100 by 2030. This will drive demand for Grade-A office spaces, benefiting commercial real estate and property management firms.
Hospitality & Tourism Growth
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Tourism Initiatives: The government plans to develop 50 tourism destinations and streamline e-visa facilities to attract more travelers, boosting the hospitality sector and its related property business.
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Support for Homestay Businesses: MUDRA loans will be extended to small homestay businesses, enhancing tourism-driven real estate market demand.
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Investment Momentum: Last year, the hospitality sector saw investments worth $340 million, and with continued policy support, the sector is expected to attract more property investment and expansion opportunities.
Conclusion
The Union Budget 2025 reinforces India’s long-term growth vision with strategic policies that benefit real estate. While certain expectations, such as an increase in home loan interest deduction limits, remain unmet, the budget’s focus on tax relief, infrastructure, and liquidity improvements will drive demand for both residential properties and commercial real estate. With strong momentum in the property business, these measures are expected to support India's economic growth and urban expansion in the coming years. For seamless rental solutions in this evolving market, visit EazeMyRent.
