GST Rate Cuts to Boost Real Estate and Housing Demand

The Goods & Services Tax (GST) Council, in its 56th meeting, has approved a simplified two-tier GST structure effective September 22, reducing tax rates on key items to 5 percent and 18 percent.

The decision significantly impacts construction materials, including cement and steel, with rates lowered from 28 percent to 18 percent. Industry experts say this will cut input costs, improve project viability, and accelerate infrastructure growth. The move comes at a crucial time, coinciding with India’s festive season, which is expected to boost consumer sentiment and spur fresh housing demand.

Key Highlights

• GST on cement and steel reduced from 28 percent to 18 percent
• Move lowers housing costs and boosts affordable housing
• Simplified GST structure eases compliance for developers

For homebuyers, reduced construction costs will make housing more affordable, particularly in the affordable housing segment, where savings can be directly passed on. This aligns with the government’s long-term Housing for All vision by enabling broader access to quality housing.

For developers, the simplified GST regime eases compliance, improves transparency, and ensures better supply at competitive prices. The new structure also promises long-term sectoral growth by reducing tax complexity, boosting affordability, and strengthening demand.

Pradeep Aggarwal, Founder & Chairman, Signature Global (India) wholeheartedly welcomed the GST Council’s move on rate rationalization ahead of the festive season. “By reducing the tax burden, the move comes as a major relief for the common man. The housing sector, particularly, stands to benefit from GST reduction on input materials like cement from 28% to 18% and granite blocks from 12 percent to 5 percent, as this will ultimately reduce home prices for consumers and create sustainable demand across segments.”

Dr Niranjan Hiranandani, Chairman, Hiranandani welcomed the decision,“The GST rationalization is a strategic boost for the economy. By enhancing purchasing power, stimulating consumption, and helping contain inflation, this reform creates a multiplier effect that will propel India’s GDP growth beyond 8 percent. At a time of global uncertainty, such fiscal stimulation underscores the resilience of our domestic economy and strengthens confidence in India’s growth trajectory. Industry and consumers alike stand to benefit from this progressive step.”

G Hari Babu, National President of NAREDCO adds, “The GST rationalisation is a very important step, and we welcome it wholeheartedly. This move brings special relief to real estate and its allied industries. Lower GST on key materials like cement and steel will directly reduce costs. Projects will become more viable and progress faster. Affordable housing will gain the most, as reduced construction costs can be passed on to homebuyers. This will make homes more accessible and push forward the government’s Housing for All vision. The entire value chain of housing and infrastructure will benefit from this reform.”

Also Read: Real Estate Set to Surge after GST Cut on Cement, Construction Materials

Overall, the GST rate cuts act as a timely catalyst for India’s real estate and infrastructure sectors, offering a win-win for both homebuyers and developers while giving a wider economic push to the housing market and construction industry.