Budget 2025: Real estate sector hails SWAMIH, Urban Challenge, tax reliefs

Real estate did not very feature prominently in Finance Minister Nirmala Sitharaman's Union Budget 2025, but the sector stands to gain from measures aimed at boosting consumption. A key announcement for the sector is the ₹15,000 crore SWAMIH (Special Window for Affordable and Mid-Income Housing) Fund 2, a blended finance initiative involving contributions from the government, banks, and private investors. The fund aims to complete another 1 lakh housing units, adding to the 50,000 already delivered under the previous scheme. An additional 40,000 units are slated for completion in 2025, providing relief to middle-class families burdened by dual payments of EMIs and rent. Other measures, such as TDS/TCS rationalisation, the ₹1 lakh crore Urban Challenge Fund, and the new income tax exemption of up to ₹12 lakh, are also expected to provide further support to the sector’s growth.

Stakeholders, however, say the absence of direct announcements for the affordable sector is disappointing. Anuj Puri, Chairman - ANAROCK Group, says the Union Budget focuses on economic expansion, infrastructure development, MSMEs, futuristic cities, and middle-class welfare and brings substantial relief for the middle class. It also aims to stimulate rural consumption -- an essential step toward unlocking India’s economic potential. "From a real estate perspective, the budget delivers 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," adds Puri.

Sanjay Dutt, CEO and MD, TATA Realty and Infrastructure, calls the Union Budget 2025 a "forward-looking vision" for sustainable growth, urban transformation, and infrastructural excellence. He commends the government’s emphasis on increasing purchasing power by increasing the tax limit to Rs 12 lakh, strengthening urban infrastructure, governance, and land-use planning, with housing continuing to be a pillar of national growth. "Additionally, the extension of tax benefits for self-occupied properties and interest subsidies further empowers homeowners. The introduction of SWAMIH Investment Fund 2.0, a ₹15,000 crore blended finance facility, will expedite the completion of over one lakh housing units, providing much-needed relief to homebuyers and stimulating the real estate sector," says Dutt.

The rationalisation of the TDS provision for senior citizens by increasing the interest exemption limit from ₹50,000 to ₹1 lakh also offers significant financial relief. "The setting up of the Urban Challenge Fund of ₹1 lakh crore ensuring well-connected and sustainable cities is also noteworthy," says Dutt.

Jagadish Nangineni, Managing Director of Sobha Ltd, calls the FM's budget a "forward-looking" one, which would draw positives from all 10 broad areas for development measures, four engines identified for growth and transformative reforms across six domains. "Income tax benefits led boost to consumption & optimism can be a key driver to growth in an increasingly complex geopolitical environment across the world. We believe that committed long-term players in the Real Estate sector with robust processes would immensely benefit from this optimistic and grounded budget," says Nangineni.

Boman Irani, President of realtors' body CREDAI says the sector remains optimistic that the announcements made by the Finance Minister will be followed by a repo rate cut later this month. "This budget supports economic stability and positive market sentiment; however, the sector was expecting additional measures, such as further incentives to boost demand for affordable housing, a higher threshold for home loan interest exemptions which has remained stagnant for a long time and a revision in the definition of affordable housing based on a minimum dwelling unit size instead of a uniform ₹45 lakh value across the country," says Irani.

He, however, welcomed the announcement of allocating the ₹1 lakh crore Urban Challenge Fund, the new UDAN scheme, and the ₹15,000 crore SWAMIH Fund 2, which will provide a boost to the sector.

Anshuman Magazine, Chairman & CEO, India, Southeast Asia, Middle East & Africa, CBRE, also appreciated the announcements with regards to capex, interest-free loans to states, and the Urban Infrastructure Development Fund, among others. "The designation of 50 cities as global hubs for tourism, spirituality, and medical services is projected to uplift regional economies substantially. This initiative will create new avenues for growth, generate employment, and prioritise local infrastructure development. The SWAMIH Fund 2 will facilitate the completion of an additional 100,000 housing units. The National Geospatial Mission is a promising move towards modernising India's land records."

Ramani Sastri - Chairman & MD, Sterling Developers, says while the budget has lent an indirect boost to real estate, it could have offered a degree of relief to first-time homebuyers to stimulate the real estate sector. "The establishment of the India Infrastructure Fund and emphasis on Public-Private partnership for infrastructure in the budget is also a game-changer for the real estate industry. The establishment of an Urban Challenge Fund of ₹1 lakh crore will fuel the ongoing momentum in rebuilding urban infrastructure and drive greater demand for real estate in the urban and semi-urban areas." Badal Yagnik, Chief Executive Officer of Colliers India, says the extension of the SWAMIH fund is a "much-expected move" as several real estate projects continue to reel under stress due to funding constraints, delaying delivery of homes. "Rationalisation of taxes and enhancement of exemption limits can boost disposable income, spurring consumption levels and real estate investments."

Piyush Bothra, Co-Founder and CFO of Square Yards, think measures like increasing home loan deduction limits would have improved financing accessibility for the sector. Bothra, however, says income tax relief and allocation under the SWAMIH fund will be a boost to the sector. "The allocation of ₹15,000 crore under the SWAMIH Fund for completing 1 lakh stalled housing units is a significant intervention. However, additional measures could have further strengthened the sector. Increasing home loan deduction limits would have improved financing accessibility, particularly for first-time homebuyers and end-users."

Madhur Gupta, CEO, Hero Realty says apart from the ₹15,000 crore SWAMIH Fund 2, ₹1 lakh crore Urban Challenge Fund, the ₹1.5 lakh crore outlay for PPP infrastructure projects will enhance urban connectivity and drive demand for real estate. "These measures collectively reinforce the sector’s growth trajectory and align with India's vision of sustainable urban development."

Ashish Bhutani, CEO, Bhutani Infra, says the 2025 Budget reinforces India’s commitment to urban transformation and infrastructure growth. "The ₹1 lakh crore Urban Challenge Fund and ₹1.5 lakh crore interest-free loans for capex will unlock new opportunities for real estate and city development like Noida. The push for PPP projects and the upcoming Investment Friendly Index for states signal a more structured and investor-friendly approach."