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NAREDCO Urges Budget Boost for Indian Housing Sector

  //house-home.news-articles.net/content/2026/01/2 .. rges-budget-boost-for-indian-housing-sector.html
  Published in House and Home on Thursday, January 22nd 2026 at 13:35 GMT by The New Indian Express
      Locale: INDIA

New Delhi, January 22nd, 2026 - The National Real Estate Development Council (NAREDCO), a leading body representing real estate developers and stakeholders across India, has presented a comprehensive set of recommendations to the government ahead of the Union Budget 2026-27. Their proposals focus on stimulating the housing sector, increasing affordability, and addressing the growing urban accommodation crisis. The recommendations highlight a desire to spur economic growth, create jobs, and attract vital investment into the real estate landscape.

The central theme of NAREDCO's plea is a substantial boost to homeownership and a proactive approach to rental housing solutions. Currently, homeowners are permitted to deduct up to Rs 2 lakh (approximately $2,400 USD based on current exchange rates) in interest payments on their home loans. NAREDCO argues that this limit is insufficient to incentivize widespread homeownership and has proposed a significant increase to at least Rs 5 lakh (approximately $6,000 USD). This upward adjustment aims to make homeownership more financially accessible for a broader range of the population, particularly first-time buyers.

Recognizing the persistent housing shortage, especially in urban centers, NAREDCO's recommendations extend beyond promoting homeownership to actively fostering the rental housing market. The body advocates for a dual approach: incentivizing landlords to provide rental properties and offering rebates to tenants. The proposed "Rental Housing Rebate" would allow tenants to claim a deduction on their rental payments, effectively lowering the cost of renting and encouraging more individuals to choose this option. This shift aims to alleviate the pressure on homeownership and cater to the diverse housing needs of a rapidly urbanizing India.

Beyond tax incentives, NAREDCO's proposals tackle systemic challenges within the real estate development process. The current Goods and Services Tax (GST) rates on essential building materials contribute significantly to overall housing costs. NAREDCO is requesting a rationalization of these rates, arguing that lower GST would lead to a direct decrease in the final price of housing units. Furthermore, the organization is pushing for infrastructure status to be granted to housing projects. This designation would unlock access to lower interest rate financing, making project development more financially viable and accelerating construction timelines.

A particularly pressing issue is the number of unfinished or 'stalled' real estate projects, which have left many potential homeowners in limbo. To address this, NAREDCO has called for the establishment of a dedicated stress fund specifically designed to provide financial assistance and support the completion of these projects. This fund would serve as a crucial safety net, protecting homebuyers and restoring confidence in the sector.

NAREDCO also emphasized the need for regulatory reform, advocating for streamlined processes to obtain building permits and approvals. The current bureaucratic hurdles and lengthy approval cycles significantly increase project costs and delay completion. The implementation of a single-window clearance system--where developers can obtain all necessary approvals from a single point of contact--is seen as a critical step towards improving efficiency and attracting further investment. The organization believes a simplified and expedited approval process will encourage more developers to participate in the housing market, ultimately increasing the supply of housing units and improving affordability.

"A streamlined regulatory framework will attract more developers to invest in the housing sector, leading to increased supply and affordability," stated NAREDCO Chairman Ashok Gupta, underscoring the potential for positive economic impact stemming from these proposed changes. The organization's leadership remains optimistic that these recommendations, if implemented, will not only revitalize the real estate sector but also contribute significantly to India's overall economic growth and social development. The upcoming Union Budget presents a crucial opportunity for the government to enact meaningful reforms and address the nation's pressing housing needs.