India Budget 2026: Housing Sector Stimulus Proposals As India prepares for the **Union Budget 2026**, Knight Frank has issued a call for decisive fiscal intervention to revitalize the affordable and rental housing sectors. The recommendations aim to counter the erosion of affordability and stabilize the broader housing ecosystem. **Market Context: Declining Affordability** The urgency stems from a significant slump in sales within the **sub-Rs 50 lakh** category. Rising property prices and interest rates have dampened demand in this price bracket, which traditionally drives volume. Without policy support, the gap between income levels and home prices threatens to widen further. **Fiscal Incentives for Homebuyers** To restore demand, the consultancy recommends revising the price limits under the **Pradhan Mantri Awas Yojana (PMAY)**. Increasing the eligibility cap would align the scheme with current market valuations, extending benefits to a larger pool of homebuyers. Additionally, there is a proposal to hike the deduction limit on home loan interest under **Section 24(b)**. Raising this threshold is viewed as essential to reducing the financial burden on middle-income households and incentivizing property investment. **Boost for Rental and Green Housing** To stimulate the rental market, the brief suggests a **100% tax waiver** on rental income for a specified duration. This measure aims to encourage inventory creation specifically for rental purposes. Simultaneously, the proposal advocates for fiscal benefits directed at **green building projects**. Incentives such as tax rebates or lower financing costs for sustainable developments could accelerate the adoption of eco-friendly construction standards.