Published 18:36 IST, February 1st 2025
SWAMIH Fund, Tax Hikes, and Housing: A Shot In The Arm For Real Estate?
Experts are linking the tax relief announced in Budget 2025 to a potential surge in housing demand.

In Budget 2025, Finance Minister Nirmala Sitharaman announced an allocation of ₹15,000 crore to expand the SWAMIH Fund-2, which is aimed at completing 1 lakh stalled housing projects. These projects, which have been delayed for years, have left thousands of homebuyers waiting for their homes. The fund aims to speed up the completion of these developments, reducing the backlog, which, as per PropEquity, includes 5.08 lakh units across nearly 2,000 projects.
Experts believe that this extension of the SWAMIH Fund is good news for stabilising the real estate market and ensuring that housing remains accessible, especially for first-time buyers.
Boosting Disposable Income to Drive Housing Demand
Experts are linking the tax relief announced in Budget 2025 to a potential surge in housing demand. By raising the income tax exemption limit to Rs 12 lakh (Rs 12.75 lakh including standard deductions), the government is boosting disposable income for middle-class families. This increase in take-home pay is expected to enhance purchasing power, making homeownership more attainable for many, according to the real estate professionals.
With more disposable income, experts believe that there will be a notable uptick in housing demand. Arvind Nandan, Managing Director of Research & Consulting at Savills India, noted that the new tax structure will drive demand for both primary and secondary housing markets. The increased tax relief is expected to lead to higher household consumption, increased savings, and a greater willingness to invest in real estate.
Changes to property taxation and investor-friendly measures
In another significant move, Budget 2025 allows homeowners to claim Nil valuation for two self-occupied properties instead of just one. Previously, property owners could only claim tax exemptions on one self-occupied property, with additional properties subject to notional rental income tax. By lifting this limitation, the government is effectively easing tax burdens on property owners with multiple homes, particularly investors.
Industry experts have welcomed the measures in Budget 2025, which are aimed at both improving affordability and simplifying the taxation process. Shishir Baijal, Chairman and MD of Knight Frank India, stressed that the government's decision to allow Nil valuation for two self-occupied properties is a progressive reform. He believes that this will help reduce financial pressure on homeowners and make it easier for families to manage multiple properties.
Yashank Wason, MD, Royal Green Realty echoed a similar sentiment, saying "By raising the nil tax slab threshold to Rs 12 lakh, the Budget enhances the spending power of the middle class, making homeownership more attainable. Increased disposable income will help individuals manage home loan EMIs more comfortably, encouraging investment in their dream homes."
Anuj Puri, Chairman of Anarock, explained that this change will encourage investment in residential real estate, especially in tier-2 and tier-3 cities, as it reduces the tax pressures on second homes. Similarly, the government's decision to raise the TDS threshold on rental income from Rs 2.4 lakh to Rs 6 lakh annually is expected to ease compliance for smaller landlords and boost the rental housing market in metro cities.
However, some experts feel that the Budget missed an opportunity to focus on affordable housing, a segment that remains under pressure due to rising home loan interest rates and an outdated definition of what constitutes "affordable" housing. G Hari Babu, National President of NAREDCO, suggested that the government could have revised the housing cap, which has remained unchanged for nearly eight years, to help developers meet the rising demand for affordable homes.
Urban infrastructure and development focus
In addition to the housing-related measures, the Finance Minister has also proposed the establishment of a Rs 1 lakh crore Urban Challenge Fund. This fund is aimed at enhancing urban infrastructure, improving municipal services, and supporting urban planning reforms. Experts believe that this investment will unlock new opportunities for real estate growth, making cities more attractive for both commercial and residential investments.
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Updated 18:36 IST, February 1st 2025