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CREDAI has urged the government to extend tax incentives for developers building affordable housing in the upcoming Union Budget, pointing to rising construction and land costs. The industry body has also called for revising the affordable housing price cap of INR 45 lakh, introduced in 2017, saying it no longer reflects current market realities. CREDAI has suggested raising the limit to INR 90 lakh or removing it to support housing supply in urban and semi-urban areas. It also sought a reduction in GST on construction inputs to lower overall project costs. The association highlighted strong post-pandemic housing demand, improved transparency under RERA, and its continued focus on sustainable and green real estate development.
The real estate developers apex body, CREDAI, has urged the government to extend tax incentives to developers building affordable housing projects in the upcoming Union Budget, citing rising construction costs and growing demand for lower-priced homes. The association said policy support is necessary to ensure continued supply in the affordable segment, which has seen pressure due to higher input costs over the years. Advertisement
CREDAI, which represents over 15,000 developers across the country, also called for a revision in the current affordable housing price threshold of INR 45 lakh. The cap was introduced in 2017, and according to the association, it no longer reflects present market realities. CREDAI National President Shekhar Patel said construction costs have increased significantly since the cap was set, making it difficult for developers to launch viable affordable housing projects under the existing definition.
The association stated that the price ceiling should either be removed or raised to INR 90 lakh to align with current land and material costs in urban and semi-urban markets. CREDAI expressed hope that Budget 2026 would include measures to support developers and improve housing supply in this segment.
CREDAI National Secretary Gaurav Gupta said that an upward revision in the price cap would directly benefit homebuyers, as affordable homes attract a lower GST rate of 1 per cent. He added that developers currently bear a higher tax burden on construction inputs and work contracts, where GST is levied at 18 per cent. Reducing this rate to 12 per cent, he said, would help lower overall project costs and make homes more affordable.
The association also pointed out that the government had earlier introduced tax incentives for affordable housing projects, which helped improve supply and encouraged developer participation. CREDAI said similar measures are needed again to sustain momentum in the segment.
Highlighting broader sectoral developments, Patel said the implementation of the Real Estate (Regulation and Development) Act has improved transparency and buyer confidence. He noted that the real estate sector is currently growing at a compounded annual growth rate of around 10-12 per cent.
CREDAI also reiterated its focus on sustainability. The association is encouraging members to develop green buildings amid rising urban populations and environmental concerns. It has set a target to achieve net-zero carbon emissions by 2047. As part of its environmental initiatives, CREDAI has undertaken afforestation activities on about 9,000 acres in Nashik and 150 acres in Gurugram, and has approached state governments to allocate land parcels for similar efforts.
Commenting on market conditions, Patel said housing demand and prices have remained strong in the post-pandemic period, and the current trend is expected to continue in the coming years.
Established in 1999, the Confederation of Real Estate Developers Associations of India is the country's largest real estate industry body.
Source PTI
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