GURUGRAM: In Union Budget 2025 major emphasis was given to real estate, tax reforms, and economic growth. Nirmala Sitharaman, the Finance Minister, in her latest budget brought several key measures focusing on housing, urban infrastructure, and investment, set to enhance real estate dynamics. Various initiates were introduced to support housing and urban development, with no direct changes on home loan benefits or property tax. 

Here’s what the latest budget brought for the real-estate sector in 2025:

SWAMIH Fund 2

Providing relief and much-needed support to homebuyers, FM of India announced SWAMIH Fund 2. Under SWAMIH Fund 1- 50,000 units have already been completed with key handovers. Another 40,000 are set to be delivered in 2025. 

Leveraging the success, SWAMIH Fund 2 has been launched with a funding of Rs.15,000 crores to revive the delayed projects and completion of another one lakh units. This initiative will help homebuyers get relief, who are caught between paying rent towards their current (temporary)home and paying EMIs for the incomplete home. This initiative has been introduced with an aim to resolve financial hurdles, and fast-track construction. 

Many projects have been stuck due to permit delays, and financial constraints, putting  homebuyers hard-earned money at risk. Expansion of SWAMIH initiative will help resolve issues such as financial bottlenecks, and pending approvals, getting construction back on track, by furnishing funds to the delayed projects. This will help restore homebuyers trust in the real estate industry and allow developers a chance to deliver projects on time. 

Tax Relaxation on Second House 

At present, home owners can only avail tax exemption on one property, while second one incurs tax as it is deemed for generating rental incomes even if family members reside in the second house. 

Budget 2025 is going to bring significant change for homebuyers and property owners, enabling them to avail tax relief on two self-occupied properties, without conditions. This will not only simplify tax compliance but also offer greater financial flexibility to home buyers buying residential properties as investment.  

Increased TDS Annual Limit on Rent 

The annual limit for TDS has been increased to Rs. 6 lakh from Rs.2.40 lakh on rental income. This will benefit small tax-payers by reducing transactions liable to TDS. 

Public Private Partnership 

Public Private Partnership (PPP) is an arrangement between a Government owned entity and private sector entity for the provision of public assets and public services. It is managed by the private sector entity, for a specified period of time, where performance linked payments are released to the private sector entity based on specified and pre-determined performance standards, measurable by the public entity or its representative.

To make this process seamless and more efficient, all infrastructure-related ministries have been directed to come up with a pipeline of projects for 3 years which will be administered in PPP mode. Including states, the ministries can seek support from India Infrastructure Project Fund scheme for preparing PPP proposals. 

Focus on Urban Sector 

To improve overall functionality of the urban areas, reforms related to planning, urban land, municipal services and governance would be encouraged. The government will also establish an Urban Challenge Fund to bring into effect the proposals for ‘Water and Sanitation,’ ‘Creative Redevelopment of Cities, and ‘Cities as Growth Hub.’ A fund of Rs.1 lakh crore will be dedicated to this initiative, with a proposal for allocation of Rs. 10,000 crore in 2025-26. 

It will finance up to 25% cost of the bankable projects provided at least 50% of the cost gets funded from PPPs, bank loans, and bonds. 

In addition to that, a provision of Rs 1.5 lakh crore has been proposed for interest-free loans with a tenure up to 50 years. This outlay will be for states’ incentives for reforms, along with capital expenditure.

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