Shares of Indian real estate companies rose on Saturday after the government announced tax cuts to boost middle-class spending in Asia’s third-largest economy. The move is intended to increase investments in residential housing, benefiting homebuyers and developers.
Investors and economists are optimistic about the government’s proposal to decrease income tax rates in the 2025-26 budget. Experts anticipate the cutbacks will enhance disposable income and improve consumer demand, alleviating concerns about slow consumption in previous quarters.
Following the announcement, the Nifty Realty Index rose 3.3%, its highest single-day increase in nearly eight months. Most companies in the sub-index rose, with important real estate players including Prestige Estates, DLF, and Sobha jumping 2% to 6%.
According to an expert, the tax drop will increase demand for affordable housing. Middle-class homebuyers, landlords, and investors stand to profit from lower tax bills and greater affordability.
In a significant move, the government now allows homeowners to claim tax breaks on two self-occupied residences rather than just one. This change is projected to reduce tax burdens, promote homeownership, and increase real estate investment, particularly in second homes and Tier 2 and 3 cities.
