Post-Budget Reset — REIT Tax Tightens, Affordable Housing Push, RE Status Quo
Budget Feb 1 delivered three things that matter for HNI real estate: REIT distribution taxation tightened, Rs 2L affordable housing interest deduction restored, real estate LTCG regime untouched.
Key findings
- REIT distributions now taxed as income from other sources at slab.
- Affordable housing deduction restored — supports developer launches in under Rs 50L ticket.
- Real estate LTCG at 12.5% (or 20% plus indexation for pre-July 23, 2024 holdings) preserved.
- RBI February MPC cuts 25 bps to 6.25% — first cut of the cycle.
- Gurgaon DLF, M3M post-Budget pre-sales touch 4-quarter highs.
- Pre-leased Grade-A Hyderabad/Bengaluru cap-rates compress to 7.6-7.8% — vs REITs at 7.0-7.2% implied yield.
Budget 2025 — Real Estate Read
What changed, what didnt, and which assets re-rate / de-rate.
REIT vs Physical Commercial — The New Math
Post-tax IRR comparison under the new REIT distribution regime.
Rate Cut Pass-Through
How the 25 bps shows up in EMIs, developer cost of capital, and absorption.
Gurgaon Post-Budget Heatmap
Corridor-by-corridor pricing and absorption response.
Verdict — Post-Budget Trades
Three high-conviction trades for the new regime.
EstateVeda Verdict
Rotate from REIT exposure to direct pre-leased Grade-A commercial. Gurgaon Q4 FY25 launches will price 6-9% higher post-Budget — write before March if pipeline clarity exists.