Budget 2026: Tax Boost Crucial to Solve India's Housing Paradox

• India's real estate market faces a paradox: luxury housing thrives while affordable housing supply collapses, with only 36 affordable homes supplied for every 100 demanded.
• Developers avoid affordable housing due to razor-thin margins, rising construction costs, and expensive urban land, making premium projects more profitable.
• Current affordability metrics like Mumbai's EMI-to-income ratio hide high upfront costs and traditional banking exclusions for self-employed buyers.
• Outdated GST thresholds (₹45 lakhs for affordable housing set in 2017) and the inability for developers to claim input tax credits create a hidden tax burden, inflating prices.
• Revamping Section 80-IBA with extended project life, higher unit value caps, and increasing home loan interest deduction to ₹5 lakhs are crucial for boosting affordable housing supply.

Why It Matters: Outdated policies and tax structures are hindering affordable housing; Budget 2026 must introduce reforms to revive the segment.