Everything from Union Budget 2018 that would affect the Real Estate sector!

February 28, 2018

The Union Budget declaration has revealed a bunch of hopes and disappointments for the real estate sector with the former dominating most part of it.

Arun Jaitley signalled a few positives that will help the sleeping property scenario wake and rise a bit. Though there won’t be pathbreaking impacts still this will be a refresh of sorts for property investors.

According to Joe Verghese, Managing Director of Colliers International India, “the Budget seems to be heading to have minimal direct impact on the Real Estate industry. This comes as a significant departure from the last three years.”

The Union budget will definitely focus more on the social aspects of the economy such as creating more jobs, constructing a future-ready infrastructure and improving home buying abilities for the general public.

Affordable Housing to observe a rise

Affordable housing has been the cornerstone of property discussions since the start of this year and it will continue to reign the union budget 2018 – 19 as well.

The government is looking to leverage the spot on the response in this sector by introducing more projects and levying lower taxes on the same. To add to this, Santosh Rungta, president of CREDAI, said, “The establishment of a dedicated affordable housing fund under the National Housing Bank for priority sector lending will provide a further impetus to the development of housing in this segment,”

This is set to boost up the economy in several ways. One, that the industries that serve the affordable housing sector will gain growth due to the subsequent rise. Two, that the relaxation of income tax to diminish the tax difference between the circle rate and real estate acquisition rate, will be seen in positive light.

Rural Economies

Government is also looking to boost the rural economies by introducing aids for farmers in several ways. This is another prominent proof of the budget bringing a significant change in the society.

“Real estate is a function of multiple parameters and bearing of the overall economy. So if there is an overall boost to the economy through farm spending and so on; then we will see a rub-off effect on the real estate sector,” he told BusinessLine.


The private sector was hardly moved by the Union budget announcements as there was no significant improvement for home constructors. There were no tax benefits given to the construction sector who is pressed under the GST implications and need a relief from the complex mechanism that is currently operating in it.

Further, the housing loan tax deduction limit which was hoped to be increased up to 5 lakh per annum is still stuck on its original point of 2 lakh per annum, adding disappointment.


This is the last full budget before the upcoming 2019 elections and clearly, not a lot except affordable housing and rural development has come out of it for the real estate sector.

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