In India, homebuying is still held back by low disposable incomes and steep upfront costs. Add to that a maze of tax rules and paperwork-TCS, PAN requirements, and especially tricky NRI regulations-and the process often feels slow and overwhelming. For renters, first-time buyers, and Gen Z, owning a home can seem more distant than ever.
For years, buying a home in India was as much a tax decision as a life goal. Deductions on home loans made EMIs feel lighter, at least on paper. That logic is now changing. Under the new tax regime, the focus has quietly shifted. Instead of saving through deductions, taxpayers are seeing more money in hand each month thanks to lower tax rates. There are fewer exemptions, but the trade-off is simple-higher take-home salary. Experts say that the new tax regime is likely to empower Gen-Z workforce to buy their first home. That extra cash flow is starting to matter more than tax breaks ever did. For many buyers, it directly improves their ability to manage EMIs, plan down payments, and think about home ownership with more confidence. In a way, the new regime doesn’t push people to buy homes for tax savings. It gives them the liquidity to buy when they are actually ready, feel experts.
Adhil Shetty, CEO & Co-Founder, BankBazaar said the Income Tax Bill 2025 is fundamentally a simplification reform that strengthens the housing ecosystem. “The higher exemption threshold of Rs 12 lakh leaves individuals with more take-home income, which improves day-to-day liquidity and EMI capacity. This gives borrowers greater flexibility to service loans and build stronger credit profiles over time. For younger, first-time buyers in particular, better cash flow can make home ownership more accessible and support more disciplined borrowing behavior.”
Experts, however, highlighted that home buying decisions still depend on larger factors like property prices and interest rates. Tax changes can support intent, but they do not alter these fundamentals.
“What this reform does provide is a more predictable environment for households to plan finances based on actual needs rather than tax-saving requirements. Over time, simpler compliance and improved cash flows may encourage more structured financial planning, with real estate continuing to play a role as a long-term asset when aligned with income and goals,” said Ashish Narain Agarwal, Founder & Managing Director, PropertyPistol.
The Income Tax Act 2025 introduces key reforms that enhance liquidity and improve transaction efficiency, particularly for NRIs through reduced TCS and simplified PAN-based compliance. According to experts, these measures lower procedural hurdles and make cross-border investments more seamless.
They say that the policy strengthens the ecosystem by making real estate transactions more efficient, compliant, and accessible-encouraging higher participation from both domestic buyers and NRIs.
Vishal Raheja, Founder & Managing Director, InvestoXpert Advisors, said The Income Tax Act 2025 introduces buyer-friendly policies that are equally investment-friendly, helping create positive buyer sentiment across segments. “A more transparent tax framework allows investors to make informed decisions and better support overall portfolio management. The improved liquidity may push the growth momentum in real estate allocation by 10% among urban investors. Reduced friction in transactions and higher disposable income further strengthen confidence,” said Raheja.
Real estate experts also feel that the new tax reforms will be a hit among the Gen-Z workforce as they may bet big on owning a house in their name. “The Income Tax Act 2025 will empower first-time buyers and broaden market participation. The simplified tax structure is also set to attract Gen Z, a segment seeking clarity and efficiency. We expect stronger growth and investment attraction towards Tier 2 and Tier 3 cities, where affordability aligns with policy benefits,” said Virender Kumar, VP – Marketing, Arete Group.
Akshay Taneja, CEO, TDI Infrastructure said that the new tax regime will boost the house demand, particularly in mid-income segments where price sensitivity is high. “Easy rules to buy property and simplified compliance will reduce transaction timelines and friction,” Said Taneja. Analysts say that continued government support and investment in infrastructure, including commercial corridors, will further drive real estate demand. Together, these factors significantly improve real estate accessibility, creating a more inclusive housing market while unlocking new growth opportunities across emerging regions.
