1st, Feb, 2025

Union Budget 2025: Key Highlights of Nirmala Sitharaman's Budget for Housing Sector

The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, introduced several important measures for the housing and real estate sector. These initiatives aim to boost affordable housing, enhance infrastructure, and provide financial support to homebuyers and developers.

Union Budget 2025 Highlights for Housing and Real Estate Sector

1. PMAY Boost – Increased funding for Pradhan Mantri Awas Yojana (PMAY) to accelerate affordable housing projects.
2. SWAMIH Fund 2 – ₹15,000 crore allocated to complete 1 lakh stalled housing units.
3. Urban Challenge Fund – ₹1 lakh crore for smart cities, urban redevelopment, and water & sanitation improvements.
4. TDS on Rent Increased – Limit raised from ₹2.40 lakh to ₹6 lakh, benefiting landlords and tenants.
5. Senior Citizens' Home Loan Benefit – Tax deduction on interest doubled from ₹50,000 to ₹1,00,000.
6. Green Housing Incentives – Financial benefits for developers of eco-friendly homes with solar energy & rainwater harvesting.
7. Rental Housing Push – Private sector encouraged to invest in affordable rental properties for workers, students, and migrants.

1. SWAMIH Fund 2 for Stressed Housing Projects

• The government announced the establishment of SWAMIH Fund 2 with a ₹15,000 crore corpus.

• This fund will support the completion of 1 lakh pending housing units.

• The initiative builds upon the success of SWAMIH Fund 1, which has already delivered 50,000 homes and aims to complete 40,000 more units in 2025​.

2. Urban Development and Affordable Housing

• The government plans to strengthen urban sector reforms, including land governance and municipal services.

• Focus on affordable housing projects under the Pradhan Mantri Awas Yojana (PMAY) to provide homes to middle and lower-income groups​.

• A new Urban Challenge Fund of ₹1 lakh crore has been proposed to finance projects for smart city development, creative urban redevelopment, and better water & sanitation infrastructure​.

3. Tax Benefits for Homebuyers and Senior Citizens

• The annual limit for Tax Deducted at Source (TDS) on rent has been raised from ₹2.40 lakh to ₹6 lakh, benefiting small landlords and tenants​.

• The limit for tax deduction on interest for senior citizens has been doubled from ₹50,000 to ₹1,00,000, making housing loans more affordable for retirees​.

4. Support for Real Estate and Infrastructure Development

• The PM Gati Shakti portal will be expanded to provide better mapping and data access for private sector investors to improve real estate project planning​.

• Special focus on urban land planning and public-private partnerships (PPP) in real estate infrastructure.

• The Asset Monetization Plan 2025-30 will unlock ₹10 lakh crore for new projects, including real estate and housing developments​.

5. Real Estate Investment & REIT Expansion

• Measures to attract more investment into Real Estate Investment Trusts (REITs).

• Encouraging foreign and domestic investors to finance real estate projects.

6. Smart Cities & Sustainable Housing

• More incentives for green building initiatives like solar-powered homes, water conservation, and eco-friendly construction materials.

• Investment in smart city projects will boost real estate growth in urban areas.

Conclusion

The Union Budget 2025 prioritizes affordable housing, infrastructure development, and financial assistance to homebuyers. With initiatives like SWAMIH Fund 2, Urban Challenge Fund, and TDS relaxation, the housing sector is expected to witness growth, benefiting both developers and homebuyers.