Budget 2025: What to Expect for Commercial Real Estate Sector?

28 Jan 2025 , 11:34 AM

Over the recent years, India’s commercial real estate market has seen several developments and significant growth. As the Union Budget 2025 is right next door, industry experts have been vocal about their expectations from Finance Minister Nirmala Sitharaman in the commercial real estate sector. Market experts are hoping for changes like policy revisions, tax reliefs, etc. 

Hence, here are some of the things that real estate sector is looking forward to in the upcoming budget:

1. The real estate market has seen excellent recovery after the pandemic. Therefore, considering the high growth potential, developers are expecting some provisions to commercial property development including an enhanced credit facility at cheaper interest rates.
2. Further, borrowing costs have also been a challenge, so reducing such costs would drive new project launches, be it office spaces, co-working spaces or retail centers. Aside from that, the government must focus on improving the infrastructure of Tier 2 and Tier 3 cities in conjunction with CRE. Such moves would streamline connectivity and enhance urban infrastructure allowing businesses and other investors to enter the cities and help in the growth of the commercial property market.
3. Another change requires policy revision regarding land acquisition. With the simplification of processes and land purchasing and reducing extra costs, large scale projects will be easy to construct. Aside from that, given the recent capital gains revisions, taxation rules are expected to be more clear. Creating a stable tax environment is vital because it helps investors create trust.
4. Commercial Real Estate in India is expected to witness significant growth, however, it is still dependent on the government for growth and security. With this, commercial real estate players are anticipating reforms for long term investment and increased demand.
5. Extended perquisites along with streamlined compliances may promote higher activity in the REIT sector, allowing more liquidity to the sector. Therefore, extending new tax credits to taxpayers is most looked forward to, specially in renewable, water or other energy systems. 

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