Kolkata Realtors Seek Tax Relief, Higher Affordable Housing Cap in Union Budget

Real estate developers in Kolkata have urged the Centre to use the upcoming Union Budget to recalibrate housing policies in line with rising land and construction costs, with key demands ranging from higher tax benefits for homebuyers to a long-pending revision of the definition of affordable housing.

Industry players said revisiting price caps for affordable homes, rationalising GST on under-construction property and easing approval processes could significantly boost demand, particularly in the mid-income segment.

The Union Budget is set to be tabled on February 1, Sunday.

Sushil Mohta, president of CREDAI West Bengal and chairman of Merlin Group, said the sector wants reforms that reflect present-day market realities.

"Revisiting the affordable housing definition, rationalising housing loan interest deductions and streamlining GST rates will significantly improve affordability and demand, especially for middle-income homebuyers," he told PTI, adding that a policy push for rental housing and wider access to formal housing finance is also crucial amid rapid urbanisation.

Mahesh Agarwal, managing director of Purti Realty, said continued policy support through tax rationalisation and infrastructure spending remains critical.

"A re-evaluation of affordable housing price limits in line with rising land and construction costs, along with adjustments to GST on under-construction property, will enhance affordability," he said, stressing that simpler tax frameworks and incentives for first-time buyers would help stabilise the market and accelerate project execution.

Echoing similar concerns, Merlin Group MD Saket Mohta said construction costs have risen sharply since the introduction of GST in 2017, making further rationalisation necessary.

He also called for raising the affordable housing price cap from ₹45 lakh to around Rs 80-90 lakh and expanding unit size norms.

"Mid-income housing will be the key demand driver going into 2026, and supportive tax and policy measures are essential to sustain growth," he said.

Eden Realty MD Arya Sumant said the Budget must balance fiscal discipline with growth-oriented reforms.

"Higher home loan interest deductions for mid-income and first-time buyers, an updated affordable housing definition, GST rationalisation and faster approvals will improve project viability and speed-to-market," he said, adding that sustained urban infrastructure investment would unlock demand across residential and commercial segments.

Sahil Saharia, CEO of Bengal Shristi Infrastructure Development Ltd, said the focus should shift towards large, integrated developments.

"Policy support for mixed-use townships, rental housing and commercial hubs, along with faster clearances and digital single-window mechanisms, can help create self-sustained urban ecosystems and improve execution efficiency," he said.

Developers said clear and stable policies in the Budget could not only revive homebuyer confidence but also attract long-term capital, ensuring sustainable growth of the real estate sector in eastern India.