credai-seeks-15pc-tax-for-affordable-housing-in-budget-2025

The realtors' apex body, CREDAI, has proposed that the government set income tax on affordable housing projects at 15 per cent in the upcoming Budget, asserting that this would boost the supply of low-cost homes, which are in highest demand.  

The Confederation of Real Estate Developers' Associations of India (CREDAI), representing over 13,000 developers, has put forward several suggestions for the Union Budget to address critical challenges facing the sector.  

These recommendations include revising the definition of affordable housing, providing tax incentives for real estate companies to construct affordable homes, and increasing the deduction limit for principal and interest payments on home loans by individuals.  

CREDAI has raised concerns over the declining share of affordable housing in the total fresh supply over recent years. The reduced supply has also led to a drop in the share of affordable homes in overall sales, a trend that CREDAI has emphasised must be reversed as a priority.  

“To boost the supply of affordable housing, CREDAI recommends extending the lower 15 per cent income tax rate, currently available to manufacturing companies, to affordable housing projects,” the association stated.  

The industry body believes this move would incentivise developers to focus more on affordable housing developments.  

Given that real estate prices have risen by over 50 per cent since the introduction of the affordable housing definition in 2017, CREDAI has urged the government to revise the current cap of Rs 45 lakh.  

CREDAI National President Boman Irani said, "With its significant contribution to GDP, employment generation, and infrastructure development, the Indian real estate sector has always been a cornerstone of nation-building. Currently influencing approximately 53 per cent (directly and indirectly) of India's GDP and employing over 8 crore people, this sector is crucial in addressing the housing needs of 40 crore Indians without adequate homes."  

With a vision to deliver 7 crore homes in the next seven years and create 2 crore new jobs, Irani said CREDAI's Budget 2025 recommendations aim to resolve longstanding issues and unlock the sector's full potential.  

"We are confident that these measures will drive growth, empower homebuyers, and support India's economic ambitions," he added.