For Budget 2026, homebuyers have proposed that the government clearly define ‘affordable’ and ‘mid-segment’ housing, including caps on permissible rates per square foot of carpet area and minimum mandatory facilities and amenities. Their wishlist also includes stricter accountability for developers, with financial penalties for project delays or failure to honour booking-stage commitments, mirroring the loss of benefits faced by allottees in the event of default.
Homebuyers have also suggested that the government introduce a subsidised interest scheme on home loans for allottees purchasing homes in the affordable and mid-segment categories, linked to timely EMI payments. They say tying the benefit to payment discipline would encourage financial prudence while improving affordability for genuine end-users.
Promote affordable and mid-segment housing
The real estate sector has increasingly gravitated towards luxury housing, resulting in a widening gap for the middle class and first-time homebuyers. To correct this structural imbalance, Forum for People’s Collective Efforts (FPCE), a homebuyers' body, has proposed the introduction of a subsidised interest scheme on home loans for allottees purchasing units in affordable or mid-segment housing projects, provided that the allottee services EMIs on time and there is no default on the part of the promoter.
The proposed incentive mechanism must be buyer-centric rather than promoter-centric. Instead of extending benefits directly to developers, the subsidy should flow to homebuyers, who bear the long-term financial burden of housing through home loans and interest payments. Such a demand-side incentive will stimulate genuine housing demand, compel promoters to launch projects catering to the majority, and enable sustainable sectoral growth driven by end-users rather than speculative supply focused in the already clogged towns, FPCE said.
{{/usCountry}}The proposed incentive mechanism must be buyer-centric rather than promoter-centric. Instead of extending benefits directly to developers, the subsidy should flow to homebuyers, who bear the long-term financial burden of housing through home loans and interest payments. Such a demand-side incentive will stimulate genuine housing demand, compel promoters to launch projects catering to the majority, and enable sustainable sectoral growth driven by end-users rather than speculative supply focused in the already clogged towns, FPCE said.
{{/usCountry}}To ensure transparency, the government should issue clear and uniform guidelines defining ‘affordable’ and ‘mid-segment’ housing. These guidelines should encourage development in semi-urban areas to decongest major cities and towns; prescribe maximum permissible rates per square foot of carpet area; specify minimum mandatory facilities and amenities, such as percentage of open spaces, essential civic services, and basic infrastructure, it said.
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Real estate promoters should be made accountable
Just as allottees who default on payment obligations should lose the benefit of interest subsidy, promoters must be held equally accountable for delays, non-delivery, or failure to honour commitments made at the time of booking, FPCE has said.
It has also recommended that if promoters default, all EMIs received by the promoter entity during the year be added back to their profit calculations as a penalty, thereby disincentivising project delays and contractual breaches.
“The underlying principle must be unequivocal: a promoter’s promise to an allottee is sacrosanct and non-negotiable. Balanced accountability on both sides is essential to restore trust in the real estate sector and enable it to contribute meaningfully to the country’s economic growth,” it said.
“Homebuyers are not seeking favours; they are seeking fairness. Resident Welfare Associations should not be burdened with taxes meant for profit-making entities, and ordinary citizens deserve genuine access to affordable housing. If the government intends to strengthen the real estate sector, it must empower the common man, enforce accountability on promoters, and ensure that promises made to homebuyers are honoured in both letter and spirit,” said Abhay Upadhyay, president, Forum for People’s Collective Efforts (FPCE).
“The government should also consider increasing the home loan interest tax deduction limit from ₹2 lakh to ₹4 lakh. The government should make the definition of affordable housing more realistic. At present, affordable housing in metro cities is capped at around ₹50 lakh, whereas in a city like Mumbai, even a studio apartment is difficult to purchase within that budget,” said Geetika Pednekar, a Mumbai resident.