Nifty Realty gains 3% amid weak markets as Union Budget 2025 boosts real estate sector; Prestige Estates top gainer | Stock Market News

Budget 2025: The Nifty Realty index surged nearly 3 percent on Saturday, February 1, defying broader market weakness, as the Union Budget 2025 introduced key reforms benefiting the real estate sector. A major highlight was Finance Minister Nirmala Sitharaman’s announcement of an increased tax deducted at source (TDS) limit on rent to ₹6 lakh annually, a move expected to ease tax burdens and simplify rental transactions.

Following the budget announcement, real estate stocks saw strong gains, with Prestige Estates soaring nearly 10 percent to its intraday high of ₹1,490.80. Phoenix Mills rose 5.5 percent, while Macrotech Developers and Sobha gained 4.8 percent and 4.6 percent, respectively. Other key players, including DLF, Godrej Properties, Raymond, and Oberoi Realty, advanced over 2 percent each, reflecting investor optimism about the sector’s growth prospects.

“The Union Budget focused on economic expansion, infrastructure development, MSMEs, futuristic cities, and middle-class welfare and brings substantial relief for the middle class. It also aims to stimulate rural consumption – an essential step toward unlocking India’s economic potential. From a real estate perspective, the budget delivers both direct and indirect benefits, acting as a catalyst for growth. However, a notable shortfall was the absence of major announcements for the affordable housing sector, leaving stakeholders disappointed. Despite this, the budget overall remains strong and growth-oriented, with a clear focus on economic development and enhanced consumption,” said Anuj Puri, Chairman – ANAROCK Group.

While the affordable housing sector saw fewer direct benefits, the budget is, overall, pro-growth, infrastructure-driven, and investment-oriented. The focus on middle-class relief, urban development, and connectivity is expected to stimulate real estate demand across various segments, making it an overall progressive and impactful budget.

Budget Announcements

One of the most significant measures in the budget is the increase in the TDS threshold on rent from ₹2.4 lakh to ₹6 lakh annually. This revision is expected to reduce tax compliance burdens, improve liquidity for landlords, and make the rental market more efficient. The higher threshold means landlords will now only need to deduct TDS on rental income exceeding ₹6 lakh per year, reducing the immediate financial strain on both property owners and tenants.

Another major relief for homebuyers and investors is the introduction of nil valuation for two self-occupied properties, instead of just one. Previously, homeowners were taxed on notional rental income from a second home, but now they can claim tax exemptions on both properties. This move is expected to encourage second-home investments, particularly in Tier 2 and 3 cities, promote homeownership, and ease tax pressures on the middle class. By simplifying financial constraints and tax structures, the government aims to increase real estate investments and stimulate housing demand.

The budget also introduced key initiatives aimed at urban development and stalled housing projects. The creation of a ₹1 lakh crore Urban Challenge Fund is set to enhance infrastructure, unlock real estate potential, and transform cities into major growth hubs. This initiative will facilitate planned urbanization and attract significant real estate investments.

Additionally, the government has allocated ₹15,000 crore to the SWAMIH Fund, aimed at reviving stalled residential projects and ensuring the completion of over 1 lakh pending units. This funding will provide much-needed relief to homebuyers, especially in the National Capital Region (NCR), and restore confidence in the housing market.

Overall, the Union Budget 2025 has delivered a positive outlook for the real estate sector, with key measures that boost homeownership, improve rental market efficiency, and promote urban development. While the affordable housing segment did not receive significant direct incentives, the budget remains growth-oriented and investment-focused, setting the stage for long-term real estate expansion in India.

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