The much-anticipated Union Budget 2025 has arrived, and it brings a wave of positive news for homebuyers, real estate investors, and landlords alike. With tax incentives, relief measures, and funding boosts, the real estate sector is set to thrive. If you are considering buying a home or investing in property, here’s everything you need to know about how Budget 2025 impacts you!
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Higher Disposable Income for Homebuyers
One of the biggest highlights of Union Budget 2025 is the increase in the income tax exemption limit to ₹12 lakh per annum under the new tax regime . This change means that individuals will have more money in hand, making home purchases and mortgage payments easier.
Source: Hindustan Times
This is expected to significantly impact the middle-class segment, which has been struggling with inflation and rising home loan EMIs. With increased savings, prospective buyers can now afford better homes, make higher down payments, or invest in home renovations. This move will not only encourage home purchases but also provide an indirect boost to the real estate market, especially in tier-2 and tier-3 cities.
Tax Relief on Multiple Self-Occupied Homes
Previously, homeowners could only claim nil annual value on one self-occupied property. But in a game-changing move, the government has allowed homeowners to claim tax relief on two self-occupied homes
What it means:
If you own multiple homes—perhaps one in the city and another as a holiday retreat—you can now enjoy significant tax benefits. This is particularly beneficial for families who have to maintain multiple residences for work or personal reasons. It also encourages investment in second homes, which can spur demand for real estate in emerging residential hotspots and vacation destinations.
SWAMIH Fund 2 Gets ₹15,000 Crore Boost
The government continues to prioritize stalled real estate projects. Union Budget 2025 has allocated ₹15,000 crore to SWAMIH Fund 2, with the goal of completing one lakh unfinished homes
Source: Hindustan Times
Whom does it benefit?
For homebuyers stuck in delayed housing projects, this is a huge relief, ensuring that long-pending properties will finally be delivered. Thousands of homebuyers across India have faced challenges due to delayed possession, with funds stuck in incomplete projects. This additional financial push will help developers complete construction and hand over homes, thereby restoring trust in the real estate sector and improving market sentiment.
Higher TDS Threshold on Rental Income
In another pro-landlord move, the TDS threshold on rental income has been increased from ₹2.4 lakh to ₹6 lakh per annum
Whom does it benefit?
This will benefit landlords who earn rental income, as they will face fewer tax deductions at source, ultimately encouraging a more robust rental housing market. Landlords who rent out properties, particularly in urban centers, will now have a higher take-home rental income, allowing them to reinvest in property maintenance and improvements. This can lead to better rental housing quality, attracting more tenants and boosting the overall demand for rental properties in metro and non-metro cities alike.
Also Read: How to File Rental Income in Your Tax Returns
Source: Financial Express
A Boost for Affordable Housing
The government continues to push for affordable housing, and Budget 2025 provides additional tax incentives for developers investing in low-cost housing. More details on subsidies and financing schemes are expected in the coming months.
Affordable housing remains a key focus area, with demand rising among first-time homebuyers and economically weaker sections. The new incentives will make housing more accessible to lower-income groups, providing benefits like reduced stamp duties, interest subsidies, and tax reliefs for developers who construct budget-friendly housing projects. Additionally, this initiative aligns with the government’s goal of “Housing for All,” encouraging private developers to expand their footprint in the affordable housing segment.
Also Read: Cities with Affordable Housing in India
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Is This the Right Time to Invest in Real Estate?
With the Union Budget 2025 introducing so many tax perks, incentives, and funding support, the real estate sector is set for growth. Whether you’re a first-time homebuyer or an investor, these changes will make homeownership easier and more financially rewarding.
This budget’s focus on higher disposable income, tax reliefs, and fund allocations signals a strong push for real estate growth in India. If you’ve been on the fence about buying a home in 2025, now might be the perfect time to make your move!
Suggested Read: Is This the Right Time to Invest in Bangalore’s Real Estate Market?
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Frequently Asked Questions
The Indian housing market is expected to stabilize in 2025, with muted price growth compared to the previous year’s average 21% rise.
The 2025-26 budget includes income tax rate cuts aimed at increasing middle-class disposable income, which is anticipated to boost consumer spending and investment in residential housing.
The Indian real estate market is poised for continued expansion in 2025, driven by favorable interest rates, growing economic stability, and evolving buyer preferences.
Yes, factors like favorable interest rates, economic stability, and evolving buyer preferences are propelling the industry forward, indicating a continued expansion in 2025.
Home prices in India are forecast to rise by 6.5% in 2025, largely due to demand from wealthy individuals.
Profit margins in Indian real estate vary widely based on factors like location, project type, and market conditions, making it difficult to specify an exact figure.
With the market poised for continued expansion in 2025, driven by favorable interest rates and economic stability, it appears to be a promising time for real estate investment.
Mumbai consistently ranks as the city with the most expensive real estate in India, due to its status as a financial and commercial hub.
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