With the Union budget 2026 scheduled for February 1, home buyers and the housing market are closely tracking how policy announcements could influence borrowing and purchase decisions in the months ahead.
Buyers are evaluating a combination of affordability factors, loan regulations, and process-related clarity before finalising a home purchase.
This time period before the budget often becomes a key checkpoint for home buyers, helping them align their timing, loan structure, and financial readiness with broader market conditions.
What Home Buyers Are Watching Closely
Tax Clarity and Cost Planning Remains Central / Higher Tax Relief on Home Loan Interest
One of the most followed aspects during every budget is tax treatment related to home ownership and home loans.
Currently, buyers can claim up to ₹2 lakh per year as a tax deduction on home loan interest for self-occupied properties.
However, with property prices increasing up to 45–60% in many cities, this limit no longer covers the interest most people pay.
National Real Estate Development Council (NAREDCO) has suggested raising the limit to ₹5 lakh. Buyers, especially first-time homeowners are keen to see whether the budget 2026 brings any revision.
A Fresh Look at What “Affordable Housing” Means
Affordability continues to be a constraint for many potential buyers, even though demand appears steady in certain market segments.
The government’s current affordable housing threshold is ₹45 lakh. In most Tier-I and many Tier-II cities, this doesn’t reflect ground reality today. Even basic apartments in suburban areas often cost more.
Buyers are observing whether the budget redefines this bracket as it directly impacts the subsidy eligibility, GST rates, and availability of qualifying projects in preferred locations.
Longer Loan Tenures and Interest Support
Monthly EMIs are high when home loans have shorter tenures or elevated interest rates.
First-time buyers are particularly interested in loan structuring options—such as longer repayment periods, income-linked schemes, or temporary interest relief. These could ease monthly outflows during the early earning years.
Some industry proposals also recommend allowing tax deductions from the year the loan is taken, not just after possession, which could help buyers during the construction phase.
GST Clarity on Under-Construction Properties
Under construction homes attract 5% GST if priced above ₹45 lakh, and 1% if below.
However, buyers don’t receive input tax credit, which means developers input costs get passed on. Therefore, buyers weigh this against ready-to-move options, where GST doesn’t apply but prices may be higher.
Any Budget move to rationalise GST or improve transparency on construction costs would influence this trade-off.
Stamp Duty Stability Across States
Stamp duty and registration charges vary widely across states and can add a substantial amount to the overall cost of buying a house. Buyers value predictability here; frequent changes can delay purchase decisions.
While stamp duty falls under state jurisdiction, any indication around coordination or standardisation tends to get attention during the Budget period.
Why Do These Matter Before the Budget?
Buying a home involves several interconnected factors—such as down payment, EMI comfort, tax impact, and long-term affordability.
Budget-related changes in any one of these areas can shift timelines for buyers.
- For salaried buyers, tax provisions directly affect monthly cash flow.
- For self-employed buyers, loan eligibility and documentation norms are often the deciding factors.
- For first-time buyers, upfront costs like stamp duty, GST, and registration determine whether to proceed or postpone a purchase.
The budget’s approach to these areas will play a role in shaping the purchase decisions across India’s housing market.
During this planning phase, many borrowers review lenders/banks, including options such as Kotak Home Loans, while evaluating long-term housing finance options.
Note to the Reader: This article is part of Mint’s promotional consumer connect initiative and is independently created by the brand. Mint assumes no editorial responsibility for the content.
