As India prepares for Union Budget 2026, expectations are running high among first-time homebuyers and the real estate sector. For the middle class, buying a home is no longer just an investment decision—it has become one of life’s toughest financial challenges. Rising property prices, higher home loan interest rates, and shrinking affordability have pushed the dream of owning a home further away for many families.

Real estate experts believe that Budget 2026 could be a turning point, especially for first-time buyers, if the government introduces strong policy reforms. According to industry voices, luxury housing continues to grow, but the affordable housing segment is struggling. Without timely intervention, the gap between the common citizen and home ownership may widen beyond repair.

Pradeep Mishra, Founder of Oram Group and a real estate expert, has outlined five major expectations from Budget 2026 that could significantly improve affordability and revive demand in the housing market.

1. Higher Tax Deduction on Home Loan Interest (Section 24b)

Currently, homebuyers can claim a maximum tax deduction of ₹2 lakh per year on home loan interest under Section 24(b) of the Income Tax Act. However, with property prices increasing sharply, this limit no longer offers sufficient relief.

Experts are urging the government to raise this cap to ₹4–₹5 lakh. A higher deduction would increase disposable income for middle-class families, making home loans more manageable. This change could also encourage buyers to opt for slightly larger homes or better locations without fearing excessive financial stress.

2. Redefining ‘Affordable Housing’ Limits

At present, homes priced up to ₹45 lakh are classified as “affordable housing.” While this may still work in smaller cities, it has become unrealistic in metro regions such as Delhi-NCR, Mumbai, and Bengaluru, where property prices are significantly higher.

Industry stakeholders are demanding that the affordable housing price ceiling be raised to ₹75 lakh or even ₹1 crore, especially for metro cities. If implemented, more properties would qualify under the affordable housing category, allowing buyers to benefit from lower interest rates, tax incentives, and government-backed schemes.

3. Revival of Housing Subsidy Schemes (PMAY / CLSS)

The Credit Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY) played a crucial role in helping millions of Indians buy their first home. However, its discontinuation has left a noticeable gap, particularly for middle-income groups.

Experts expect Budget 2026 to either revive or expand interest subsidy schemes for first-time buyers and middle-income households. A renewed subsidy would reduce monthly EMIs, making home ownership more accessible for low- and middle-income families struggling with high borrowing costs.

4. GST Reforms for Under-Construction Properties

One of the biggest pain points for homebuyers today is the Goods and Services Tax (GST) on under-construction properties. The GST adds to the overall cost and discourages buyers from investing in projects that are still being developed.

Real estate experts are hopeful that the government will rationalize GST rates and consider restoring Input Tax Credit (ITC) for developers. If builders are allowed to claim ITC, construction costs could come down, enabling developers to pass on the benefits to buyers through lower property prices.

5. Expansion of SWAMIH Fund for Stalled Projects

Thousands of homebuyers across India are still waiting for possession of homes stuck in stalled or delayed projects. The SWAMIH Fund (Special Window for Affordable and Mid-Income Housing) was introduced to provide last-mile funding and revive such developments.

In Budget 2026, experts expect a higher allocation to the SWAMIH Fund, which would help complete stalled projects faster. This would not only restore buyer confidence but also ensure that families who have already invested their life savings finally get possession of their homes.

Why Experts Call Budget 2026 a ‘Make-or-Break’ Moment

According to Pradeep Mishra, while luxury housing continues to expand, affordable housing is under severe pressure. Without decisive reforms, the dream of owning a home may drift further away for the average Indian.

He emphasizes that along with tax relief, the government must focus on single-window clearances, faster approvals, and infrastructure development. These structural improvements are just as important as financial incentives to ensure sustainable growth in the housing sector.

Final Takeaway

Budget 2026 holds immense significance for India’s housing market. If the government delivers on these expectations, it could revive affordable housing, boost demand, and bring first-time buyers closer to fulfilling their dream of owning a home. All eyes are now on whether this budget can truly bridge the growing gap between aspiration and affordability.