The Confederation of Real Estate Developers' Associations of India (CREDAI) has submitted a detailed set of recommendations for the Union Budget 2026-27, urging the government to take swift steps to improve housing affordability and ensure a sustained supply of residential units. The apex real estate body said its proposals are aligned with key national goals such as Housing for All, urban renewal, and the vision of a Viksit Bharat, while addressing long-standing challenges related to finance, taxation, and regulation.
CREDAI noted that targeted policy support is crucial to unlock demand and sustain the sector’s role in employment generation and urban development.
What are the key demands?
A key demand in the submission is the urgent revision of the affordable housing definition, which has remained unchanged since 2017. At present, affordable housing is capped at a value of Rs 45 lakh with fixed size limits, a framework that CREDAI says no longer reflects rising land and construction costs.
The association has proposed increasing carpet area limits to 90 square metres in metropolitan cities and 120 square metres in non-metro areas, while doing away with the price cap altogether. Moving to a purely area-based definition, it said, would boost housing supply in urban centres and reduce confusion caused by varying definitions across government schemes.
To ease the burden on homebuyers, CREDAI has also sought a revision of housing loan interest deduction limits. The current Rs 2 lakh cap, unchanged for more than a decade, has lost relevance as property prices and interest rates have increased sharply. In major cities, middle-income households often pay an annual interest of Rs 4-6 lakh, making the existing deduction inadequate.
The body has recommended removing the cap for first-time buyers of self-occupied homes and extending the benefit to taxpayers under the new tax regime, a move it believes would improve disposable income and encourage home ownership.
Credit Guarantee Scheme for affordable housing
Addressing financing challenges faced by low-income and informal-sector households, CREDAI has proposed setting up a dedicated Credit Guarantee Scheme for affordable housing. The scheme would reduce risks for lenders and expand access to formal credit for underserved segments. It would be funded through nominal borrower fees, ensuring no immediate fiscal burden on the exchequer, while promoting greater financial inclusion. The association has also called for rationalisation of GST on construction and residential units to lower overall costs for developers and buyers.
Looking ahead to rising urban migration, CREDAI has recommended launching a National Rental Housing Mission to create organised rental housing stock in major cities through fiscal incentives and tax benefits.
CREDAI President Shekhar Patel said housing remains a vital engine of economic growth, job creation, and urban transformation. He stressed that strengthening affordability, widening access to formal finance and building a robust rental housing ecosystem are essential to meet the demands of rapid urbanisation. According to him, the proposed reforms would boost investment, restore buyer confidence, enhance financial inclusion, ensure a steady housing supply, and expand affordable rental options, while also contributing to better living conditions and the gradual reduction of slums.
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