The Union Budget, which focused on economic expansion, infrastructure development, MSMEs, futuristic cities, and middle-class welfare, has brought substantial relief for the middle class. It also aimed to stimulate rural consumption — an essential step toward unlocking India’s economic potential.

From a real estate perspective, the Budget delivered both direct and indirect benefits, acting as a catalyst for growth. However, a notable shortfall was the absence of major announcements for the affordable housing sector, leaving stakeholders disappointed. Despite this, the Budget overall remained strong and growth-oriented, with a clear focus on economic development and enhanced consumption.

Key takeaways for the real estate sector include:

1. Income tax relief for the middle class: The Finance Minister announced zero income tax for individuals earning up to ₹12 lakh annually, providing a major consumption boost. This move is also expected to strengthen demand for affordable housing. Additionally, the new income tax bill will retain nearly 50% of existing provisions, while introducing personal tax reforms and rationalising TDS and TCS regimes by streamlining rates and thresholds.

2. Tax benefits for residential property investors: Investors can now claim Nil valuation for two self-occupied properties, instead of just one — a positive move for residential real estate investment. The simplified TDS on rent decreases the compliance burden and enhances liquidity for landlords and will positively impact the rental housing market, especially in metro cities. Previously, homeowners could claim only one self-occupied property as tax-free; now, they can claim two — thereby removing taxation on notional rental income from a second home. This step minimises tax pressures, promotes homeownership, and facilitates real estate investment, especially in second homes and Tier-II and Tier-III cities. Middle-class homebuyers, landlords, and investors can now benefit from reduced tax liabilities, better affordability, and less compliance hassles. By simplifying financial constraints and tax rules, the Budget has made property ownership and rental housing more accessible. This gives a significant fillip to the real estate sector, specifically to housing demand.

3. Urban challenge fund of ₹1 lakh crore for new-age cities: The establishment of this massive urban development fund will enhance infrastructure, unlock real estate potential, and transform cities into major growth hubs.

4. Fund allocation of ₹15,000 crore: This initiative will facilitate the completion of over one lakh stalled residential units, providing much-needed relief to homebuyers, especially in the National Capital Region (NCR).

5. Revamped scheme to improve connectivity: The restructured UDAAN scheme aims to connect 120 new destinations and serve over four crore passengers in the next decade. Greenfield airports in Bihar and other regions will be developed to support this expansion. This enhanced connectivity is expected to boost real estate demand in Tier-II and Tier-III cities.

6. Data access for private sector: The government will open PM Gati Shakti data to private players, while 50 top tourist destinations will be developed in collaboration with state governments. Additionally, hotels will be included in the harmonised scheme for tourism infrastructure, leading to enhanced real estate opportunities in major tourist hubs. This will also benefit the warehousing sector across the country.

7. Focus on Global Capability Centres: A national guidance framework will be introduced to help states attract and promote GCCs (Global Capability Centres), strengthening India’s position as a global business hub. Given India’s rising economic influence, this move is expected to fuel office space demand in major metros such as Bengaluru, Mumbai, Hyderabad, Pune, and Chennai, as well as Tier-II and Tier-III cities.

8. Fiscal support for MSMEs: The allocation of ₹1.5 lakh crore to MSMEs is expected to spur capacity expansion, creating a ripple effect that will positively impact industrial real estate.

The writer is Chairman, ANAROCK Group.

Construction workers are hard at work under the scorching sun. File
| Photo Credit: Karthikeyan G

The Tamil Nadu government should make insurance cover for construction workers mandatory in building plan approval applications, the Tamil Nadu AITUC Construction Workers Union has said.

General secretary of the Union N. Selvaraj told The Hindu on Friday that three construction workers died in accidents at construction sites in and around Coimbatore in the last 10 days. Even if a worker is not registered with the construction workers welfare board, his family will get ₹5 lakh compensation if he dies at the work site. Further, compensation should be paid to the worker’s family – depending on his age – by the property owner under the Workman Compensation Act.

However, most of the owners do not pay this amount. It takes a long time to settle the issue legally too and the family of the worker does not benefit.

Hence, the State government should make it mandatory for those who submit applications for building plan approval to get insurance cover for the workers. Only two public sector insurance companies have such policies. The applicant can take insurance cover for 10 workers or so – depending on the size of the building under construction, pay premium for one year and submit the details when the application is submitted for plan approval. This will benefit the workers, he said.