Real Estate's Shocking Demands for Budget 2026: Are You Ready for the Consequences?

As the Union Budget 2026 approaches, the real estate sector in India is bracing itself with a mix of measured expectations and pragmatism. Developers, advisors, and workspace operators are not seeking dramatic interventions or fleeting stimuli; rather, they are advocating for policies designed to build confidence, enhance affordability, and align with the evolving dynamics of India's cities and work culture.

The consensus across various segments—from premium housing to flexible workspaces—is clear: clarity, predictability, and effective execution will outweigh any sensational announcements in significance.

Confidence Over Corrections in Housing Policy

Dipesh Garg, Real Estate Advisor and Co-Founder of SouthDelhi1, emphasizes that the housing sector requires a steady hand rather than disruptive policy changes. In the premium residential segment, he observes that buyers are now more deliberate, with a long-term perspective, evaluating total ownership costs over short-term price fluctuations.

To unlock genuine end-user demand, Garg suggests implementing policies that moderate overall ownership costs. He advocates for measures such as stamp duty rationalization, clearer tax benefits on home loans, and smoother financing mechanisms—all aimed at encouraging home purchases without distorting market prices. For both investors and developers, the value of predictability far exceeds that of temporary incentives.

Additionally, urban infrastructure and redevelopment are critical priorities. Garg highlights initiatives like the Delhi government’s Transit-Oriented Development policy, which encourages compact, mixed-use, and walkable neighborhoods around transit corridors. By integrating housing with mobility and sustainability, such frameworks can reshape urban growth more holistically.

However, execution remains an obstacle. Many Indian cities are ready to renew aging residential areas, but project delays due to prolonged approval processes are common. Faster clearances and clarified redevelopment guidelines could unlock significant value while improving residents' quality of life.

Garg argues that sustainability has become mandatory, not optional. He calls for incentives for energy-efficient construction, green materials, and water-conscious design to reinforce responsible urban development. Moreover, stable taxation and streamlined regulatory processes are essential for building buyer trust and enabling long-term planning across the sector.

Affordability Must Go Beyond Interest Rates

Siddharth Vasudevan Moorthy, Managing Director of Vascon Engineers Ltd, believes that Budget 2026 should prioritize genuine affordability over transient signals like interest rate changes. For first-time homebuyers, stable equated monthly installments (EMIs), clear tax benefits, and easier access to credit are far more critical than minor fluctuations in borrowing costs.

Moorthy advocates for enhanced deductions on home loan interest and principal repayment, along with raising limits for self-occupied properties. Such measures could stimulate demand without inflating prices or creating speculative bubbles.

The real estate sector has also been grappling with rising construction costs. Moorthy notes that these costs have surged significantly since 2017, making it imperative to address tax-related pressures. He urges the government to relieve the 18% GST on corporate guarantees and reduce the GST on construction contracts from 18% to either 12% or preferably 5%.

A long-standing demand is to grant industry status to real estate beyond the affordable housing segment. Moorthy believes this would enhance access to institutional finance and foster more sustainable funding structures, allowing developers to approach projects with greater confidence and financial discipline.

Flexible Workspaces Reflect Changing Urban Needs

The evolution of work culture is significantly influencing pre-Budget expectations as well. Mukul Pasricha, Founder and CEO of Spring House Workspaces, indicates that the flexible workspace and commercial real estate sectors are closely monitoring how Budget 2026 addresses the normalization of hybrid work.

In recent years, businesses have shifted toward agile, cost-efficient, and community-oriented office formats. Pasricha views the upcoming Budget as an opportunity to bolster this transformation by focusing on urban infrastructure, ease of doing business, and MSME-led growth—all factors that directly impact workspace demand.

From an industry perspective, clearer taxation, smoother leasing frameworks, and incentives that promote formalization and shared infrastructure could pave the way for sustainable growth. As Pasricha points out, flexible workspaces are evolving beyond mere real estate solutions; they are becoming economic enablers that support job creation, activate city centers, and contribute to India's broader growth narrative.

In summary, the collective expectations of these industry leaders signal a sector aiming for maturity rather than mere momentum. Real estate professionals are not asking the Budget to fix the market overnight; instead, they seek to reduce friction, lower uncertainty, and support long-term quality in both housing and commercial development.

A Budget that emphasizes affordability, regulatory clarity, urban renewal, and adaptive work patterns may not create dramatic headlines, but it could lay a solid foundation for a more resilient and sustainable real estate cycle in the years to come.