Budget 2026: NAREDCO has called on the government to promote rental housing by offering appropriate incentives to real estate developers
Ahead of Budget 2026, real estate industry body NAREDCO on January 22 urged the government to revise the definition of affordable housing, recommending that homes priced up to ₹75–80 lakh be classified as affordable, instead of the current ₹45 lakh cap. The association also called on the government to promote rental housing by offering appropriate incentives to real estate developers.
The government should also enhance the deduction limit for interest on home loans to ₹5 lakh from the current ₹2 lakh, as well as provide industry status to further fuel the growth of the real estate sector, it said.
NAREDCO chairman Niranjan Hiranandani said at an event held in the Capital that the Centre has undertaken various measures to support the real estate sector but there is a need to do more for the affordable housing segment. Hiranandani suggested the government should utilise its own land for development of affordable and mid-income housing.
"We need to ensure Housing For All. Housing should get equal importance like any other infrastructure sector," he added.
The limit for deduction of interest on home loans should be increased to ₹5 lakh in respect of the self-occupied property from ₹2 lakh currently, said NAREDCO president Parveen Jain.
Jain said homes up to ₹80 lakh should be considered as affordable housing. The change in definition would help as the GST on affordable homes is just one per cent, he said.
Incentives for rental housing
He also urged the government to actively promote rental housing by offering appropriate incentives to real estate developers. Highlighting that rental yields in the housing segment remain low at just 1–3 per cent, Jain said this makes rental projects commercially unviable for developers. He suggested that tax incentives and supportive policy measures could help encourage realtors to invest in and scale up rental housing.
Industry status for the real estate sector
Jain said the association has long been demanding industry status for the real estate sector, noting that such a move would enable access to cheaper financing for key inputs, including land and construction materials.
Considering the sector's contribution to India's GDP and employment creation, the NAREDCO president said it is high time that the government provide industry status to the real estate sector, which is estimated to reach $1 trillion by 2030.
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