Budget Property Taxes 2025-26: Introduction
India’s government has unveiled a future-oriented budget for the 2025-26 financial year to support its real estate sector. It comprises changes in property taxes, revisions in home loan rates, and initiatives to promote affordable housing in India.
All these changes will impact commercial and residential property in Gurgaon and will have an effect on buyers and investors in the industry. Here in this blog, we are going to discuss the new taxation measures, the new rates of home loans, and the overall effect on the real estate industry.
Major Announcements in the Budget 2025-26
Promotion of Affordable and Middle-Class Housing
In the budget, ₹1.5 lakh crore was allocated (up from ₹80,000 crore) under the PMAY Fund for affordable housing.
To make home ownership more affordable for low- and middle-income segments to increase the demand in the housing sector.
Tax Deduction for First-Time Homebuyers
The government has suggested a deduction of up to ₹2.5 lakh on the interest of a home loan taken from banks and other institutions for first-time homebuyers.
This is bound to induce additional investment in housing property, especially in Gurgaon and booming cities.
Increased Tax on Rent Income
With regard to rent income from commercial property in Gurgaon, rent income of more than ₹50 lakh per annum will now incur 5% TDS, up from 3% as of now.
This will enhance the transparency of rent income.
Property Tax Changes
Residency Property Tax Changes:
Default Deduction on Rent: The standard deduction on rent is raised from 30% to 35% for some relief to property holders.
Green Tax Rebate: Owners who are setting up solar panels, rainwater harvesting, or other green systems will now receive an additional 10-15% tax rebate.
Commercial Property Tax Update:
Vacant Buildings Penalty Tax: All commercial buildings that are vacant for twelve months or more will incur 1.5 times the normal property tax rate as a penalty tax.
Increased GST on Leases: The GST levied on commercial leases has been raised from 18% to 20%, and hence leasing will be costlier.
Increased Depreciation Rate: The budget also comes into force for a higher depreciation rate on commercial buildings from 10% to 15%, providing more tax relief to the property owners.
Home Loan Rate Changes: Impact on Buyers
Steady Interest Rates:
The Reserve Bank of India (RBI) has not changed the repo rate of 6.5%, keeping home loan interest rates unchanged.
However, banks have increased the processing fee slightly, so borrowing is a bit more expensive.
Home Loan Subsidy Schemes:
The government has launched a 3% interest subsidy on home loans up to ₹35 lakh for first-time homebuyers.
This will boost residential real estate in Gurgaon and make it more convenient.
Fixed vs. Floating Interest Rates:
The budget says floating rates have a brighter future and shortly will probably remain lower than fixed rates.
The experts now began recommending floating-rate loans for long-term affordability.
Impact on Commercial and Residential Property in Gurgaon:
Impact on Commercial Property in Gurgaon
Increased Rent: Commercial property owners may consider increasing rent to compensate for the higher cost of TDS on rental receipts (increased to 5%).
Price Appreciation: Property prices should be appreciated along Dwarka Expressway and Sohna Road because ongoing infrastructure growth occurs in the vicinity of these two roads.
GST Effect: The GST hike on commercial rentals will increase operating costs moderately, with a likely effect of suppressed demand for commercial space.
Effect on Gurgaon Residential Real Estate
Higher Demand for Affordable Housing: With congressionally subsidized home loan interest and tax rebates making homeownership affordable for first-time homebuyers, higher competition for affordable housing is expected to prevail during 2024.
Stability in Prices: Based on increased housing supply with government incentives referring to a more affordable housing supply, residential property in Gurgaon will remain stable.
Emergence of Luxury Homes: There is increasing demand from HNIs (high-net-worth individuals) for luxury housing projects in Gurgaon. Projects include Experion Trillion, BellaVista, and M3M.
Gurgaon Real Estate Investment Suggestions:
Gurgaon Residential Property Investment Suggestions:
Make Home Loan Benefits Work: First-timers can benefit from the 3% interest concession on home loans as an inducement for them to reduce their financial burden.
Invest in Emerging Sectors: In sectors like 92, 93, and 95A along the Dwarka Expressway, there is potential for massive price appreciation with infrastructure developments.
Commercial Property Investment:
Choose Prime Locations: While investing in commercial property in Gurgaon locations like NH-8, Golf Course Extension Road, and SPR, the properties can have the potential to attract more footfalls, higher rental returns, and stabilize rental returns in the future.
Encourage medium- and long-term rentals: This will raise rental yields and reduce tenant turnover.
Invest in Co-Working Spaces: Investing in co-working spaces or flexible office spaces can be a great opportunity with growing new start-ups and small/medium-sized enterprises (SMEs). Co-working spaces are likely to rent out for the longer term and stabilize rental incomes as well.
Conclusion
The 2025-26 budget makes a wonderful blueprint for stability and growth of the real estate industry. With new property taxes, subsidies on home loans, and tax relief, real estate in Gurgaon, both residential and commercial property, remains a wonderful investment option.