Budget 2025: Tax Benefits Doubled for Homebuyers with Two Self-Occupied Houses

Good news for homeowners and real estate investors! Budget 2025 has introduced a groundbreaking reform, allowing taxpayers to claim tax benefits for two self-occupied houses. This significant change from the earlier rule—where relief was allowed only for one property—has sparked excitement among middle-class families and real estate enthusiasts.

Key Highlights of Budget 2025 for Homebuyers

1. Double Tax Exemption on Self-Occupied Homes

Finance Minister Nirmala Sitharaman announced a remarkable relaxation in tax rules during her Budget 2025 speech. Taxpayers can now declare the annual value of two self-occupied properties as nil, freeing them from the burden of paying taxes on notional rental income.

“This reform simplifies tax rules, reduces the financial stress on homeowners, and encourages investment in second homes,” said Adhil Shetty, CEO of BankBazaar.com. By addressing the evolving housing needs of families, this change promotes real estate investments across metros and Tier 2/3 cities.

2. Increased Disposable Income for Middle-Class Families

The Budget also raised the income tax exemption limit to ₹12 lakh under the new regime. With reduced taxes, middle-class households now have more disposable income for homeownership and investments.

According to Arvind Nandan, Managing Director at Savills India, this streamlined taxation will strengthen household purchasing power, leading to higher demand in both primary and secondary housing markets.

3. Simplified Tax Deducted at Source (TDS) on Rent

The government has increased the TDS threshold on rent from ₹2.4 lakh to ₹6 lakh per year, benefiting landlords and easing compliance. This will positively impact the rental housing market, particularly in metropolitan cities.

“This move enhances liquidity for landlords and reduces compliance burdens, making rental housing more accessible,” said Anuj Puri, Chairman of Anarock Group.

4. SWAMIH Fund-2: Relief for Stalled Real Estate Projects

An additional ₹15,000 crore allocation to the SWAMIH Fund-2 will help complete 1 lakh housing units in stalled projects. This initiative is a significant relief for homebuyers and a confidence booster for the real estate sector.

“The completion of stalled projects will stabilize the market and make homes affordable for first-time buyers,” said Ramendra Verma of Grant Thornton Bharat.

5. Focus on Urban Infrastructure

The ₹1 lakh crore Urban Challenge Fund announced in Budget 2025 aims to enhance city infrastructure and governance, unlocking the potential for real estate growth. According to Ramesh Nair, CEO of Mindspace Business Parks REIT, these reforms will transform cities into major growth hubs.

Impact of Budget 2025 on Real Estate

This year's budget has positioned itself as a catalyst for real estate growth, benefiting:

1. Middle-class homebuyers: Reduced tax burdens and improved affordability.
2. Landlords: Higher TDS thresholds and simplified compliance rules.
3. Investors: Opportunities in second homes and rental housing in Tier 2/3 cities.
4. Developers: Boost in confidence with initiatives like the SWAMIH Fund and Urban Challenge Fund.

While the Budget didn’t directly address affordable housing, experts believe the policies introduced will indirectly bolster housing demand and investment opportunities.

The Impact on Bangalore’s Real Estate Market

Bangalore, also known as the Silicon Valley of India, has witnessed exponential growth in the real estate market over the past decade. The city’s booming tech industry and rising demand for affordable housing have spurred the need for more residential properties, particularly in areas like Whitefield, Koramangala, Electronic City, and Hebbal.

With this new budget provision, Bangalore’s homebuyers now stand to benefit from reduced tax burdens. The ability to claim tax benefits on two self-occupied houses will make it easier for upper-middle-class families and tech professionals to invest in their dream homes across different parts of the city without worrying about the added tax implications.

Additionally, this move aligns perfectly with Bangalore's real estate trend, where many homebuyers are opting for properties in multiple locations due to the city’s sprawling growth and increasing demand for both residential and commercial spaces.

Conclusion: Win Budget for Homebuyers and Real Estate

Budget 2025 brings tax relief and financial empowerment, making homeownership and real estate investments more accessible than ever. With incentives for two self-occupied homes, increased income tax exemptions, and support for stalled projects, this budget paves the way for a more dynamic real estate market.

Whether you're a first-time buyer, an investor, or a landlord, Budget 2025 has something for everyone. Explore the opportunities and take a step toward achieving your dream of owning a home!