Budget 2026: NAREDCO Pushes for Higher Affordable Housing Limit and Rental Housing Support

Ahead of the Union Budget 2026, real estate industry body NAREDCO (National Real Estate Development Council) has urged the government to introduce reforms aimed at strengthening housing demand, particularly in the affordable and rental segments.

The association has recommended a revision in the definition of affordable housing, proposing that residential units priced up to Rs 75–80 lakh be brought under the affordable category. At present, homes valued up to Rs 45 lakh qualify for this classification, a threshold that industry experts say no longer reflects current construction costs or urban market realities.

Call for Higher Home Loan Interest Deduction

NAREDCO has also sought an increase in the income tax deduction on home loan interest, suggesting the limit be raised to Rs 5 lakh from the existing Rs 2 lakh. According to the association, the move would improve affordability for middle-income homebuyers and provide a strong demand boost to the housing market.

Push for Rental Housing Incentives

To address the growing need for rental accommodation in urban areas, NAREDCO has called on the government to introduce targeted incentives for rental housing projects. These measures, the body said, would encourage private developers to participate in the creation of professionally managed rental housing, helping migrant workers and young professionals access affordable living options.

Industry Status and Land Utilisation

The association also reiterated its long-standing demand for granting industry status to the real estate sector, stating that such recognition would improve access to institutional finance and reduce borrowing costs.

Speaking at an industry event in New Delhi, NAREDCO Chairman Niranjan Hiranandani acknowledged the steps taken by the government in recent years to support the real estate sector but stressed that further policy intervention is required to revive affordable housing supply.

He also suggested that the government consider utilising public land banks for the development of affordable and mid-income housing projects, which could help lower land costs and accelerate housing availability in high-demand regions.

With the Budget 2026 approaching, industry stakeholders are hopeful that these proposals will be considered to promote sustainable growth in the housing sector and address the evolving needs of urban India.