VISAKHAPATNAM: Ahead of the Union Budget 2026, the real estate sector is intensifying its call for critical policy revisions to stimulate housing demand and address the current challenges facing stalled projects. Major industry bodies have raised concerns over the soaring costs of land acquisition and construction, arguing that the existing tax thresholds have become obsolete, particularly in fast-growing urban areas.

One of the central points of contention is the definition of affordable housing. Stakeholders are challenging the existing price ceiling of ₹45 lakh, stating that it no longer reflects market realities in metropolitan cities, rendering many projects financially unviable for developers and unattainable for potential beneficiaries. E. Ashok Kumar, president of the Confederation of Real Estate Developers’ Associations of India (CREDAI) in Visakhapatnam, emphasized this point during a recent interview, saying, “The ₹45 lakh ceiling and the associated 1% GST benefit are outdated. They do not account for the prevailing land and material costs in most development zones. We propose that the government increase this limit to ₹80–90 lakh.”

In addition to raising the price cap, Kumar called for a reduction in the Goods and Services Tax (GST) on works contracts from 18% to 12%, a move aimed at enhancing project feasibility and increasing housing supply. He also advocated for additional incentives for first-time homebuyers, particularly those in the middle-income segment, noting that the current price restrictions exclude many potential buyers from accessing crucial tax benefits like the 1% GST rate.

The real estate industry's demands include restoring the additional interest deduction under Section 80EEA and facilitating smoother credit flows for developers, which are anticipated to lower housing costs and alleviate the financial burden of Equated Monthly Instalments (EMIs) for consumers. Kumar closed with a call for the central government to recognize the housing sector's importance by granting it 'infrastructure status' rather than merely considering it an asset class. While acknowledging the intent behind initiatives like PMAY-Urban 2.0, he stressed that further enhancements are necessary to convert policy framework into tangible housing solutions in Tier 1 and Tier 2 cities, including Visakhapatnam.