The 56th meeting of the Goods and Services Tax (GST) Council has approved the reforms that were announced by Prime Minister Shri Narendra Modi on 15th August 2025. These reforms are being considered landmark as they focus on providing major relief to the common man of India by reducing the tax burden on essential goods and services, simplifying compliance for businesses, and promoting overall economic growth.
India’s real estate sector has welcomed the move enthusiastically. Experts have particularly noted that the reduction of GST from 28 percent to 18 percent on cement and marbles, and from 12 percent to 5 percent on granite blocks, would lead to an overall decrease in the final cost of housing units, benefiting first-time homebuyers significantly.
Vimal Nadar, Senior Director & Head of Research, Colliers India.
"The newly announced two-slab GST structure of 5 percent and 18 percent is a progressive move to rationalize the prevailing inverted duty structure, improvise classification, simplify approvals & processing refunds. These measures will surely cut costs at different tiers while enhancing the ease of doing business and driving consumption.
Within real estate, the slashing of GST on cement will play a critical role in rehauling project cost structures as cement forms a major value component in the overall cost of construction. Residential real estate, particularly new homebuyers, stand to gain as developers are likely to pass on the benefit of lower costs in the form of reduced housing prices. Developers’ profitability margins, too can potentially improve, enhancing the overall financial health of the real estate sector. The timing of this rollout is appropriate, with the festive season in the offing and the real estate sector is already reaping the benefits of favourable interest rates".
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Piyush Bothra, Co-Founder and CFO, Square Yards
"The latest GST restructuring comes as a major boost for the real estate sector. With the reduction in costs of key construction materials such as cement and steel, input expenses for developers are expected to ease, making projects more viable. The move towards a simplified two-slab structure will also streamline compliance, making processes smoother and faster. For the residential segment, this is likely to translate into tangible benefits for homebuyers as developers pass on the savings over the coming months. While the impact may take some time to reflect, it could provide much-needed relief in the backdrop of rising property prices and add to overall affordability. Coupled with the optimism of the upcoming festive season, these reforms are well placed to drive stronger demand in the property market".
Shrinivas Rao, FRICS, CEO, Vestian
“The recent reduction in GST rates is poised to strengthen the real estate sector by reshaping demand–supply dynamics. Lower GST on construction materials is expected to enhance housing affordability by reducing input costs, while reduced GST on other goods could improve disposable income, thereby stimulating real estate demand. However, the overall impact may remain limited if these savings are not adequately passed on to end-consumers.”
Murali Malayappan, Chairman & MD, Shriram Properties
"The reduction in GST on cement is a significant step towards making homeownership more accessible and stimulating growth in the real estate sector. By lowering construction costs, this move will have a positive ripple effect on the entire industry. This aligns perfectly with the Prime Minister's vision of 'Housing for All,' and we believe it will play a crucial role in achieving this goal. At Shriram Properties, we appreciate the government's efforts to support the housing sector and look forward to continued policy initiatives that foster growth and development. We anticipate that this move will particularly benefit the mid-market premium housing segments, where demand is high and price sensitivity is key. This reduction will not only boost demand but also encourage innovation and investment in the sector, ultimately benefiting both homebuyers and the economy at large."
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