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The government's GST reforms have simplified tax slabs to 5% and 18% and reduced rates on key construction materials, including cement, steel, granite blocks, and sand-lime bricks. Industry leaders say these changes will lower construction costs, improve project viability, and boost housing affordability. The reforms are expected to encourage developers to launch new projects, create employment, and improve buyer confidence. With the festive season approaching, the rationalisation of GST is likely to support stronger sales across residential segments while enhancing long-term growth in the real estate and construction sectors.
The government's recent reforms in the Goods and Services Tax (GST) are being welcomed as a significant step by the real estate and construction sectors. The overhaul simplifies the GST structure into two main slabs of 5% and 18% and introduces a 40% demerit rate on select items. Key construction materials, including cement and steel, have seen their GST reduced from 28% to 18%, while granite blocks, sand-lime bricks, and similar materials are now taxed at 5%. The changes aim to simplify taxation, reduce costs for developers, and make homes more affordable for buyers. Advertisement
Rohit Gera, Managing Director of Gera Developments, said the government's move was bold and more than a small adjustment. He noted that simplifying taxes will bring relief to both businesses and consumers, improve spending, and support faster economic growth. He added that for real estate, lower GST rates on construction materials will make homes more affordable, boosting buyer confidence and housing sales, especially with the festive season approaching.
Ashish Kukreja, CEO and Founder of Homesfy.in and mymagnet.io, called the reforms a structural reset for Indian real estate. He said that shifting to a two-slab structure, with rationalised GST on construction materials such as cement, steel, granite blocks, and sand-lime bricks, directly reduces project costs and makes homes more affordable. Kukreja also highlighted that real estate employs over seven crore people, making it the country's second-largest employer, and added that the simplified GST framework can resolve long-standing issues with input tax credits and compliance. He said it is likely to encourage developers to launch more projects, create jobs, and attract institutional investments into segments like affordable housing, co-living, and rental housing.
Aniruddha Mehta, Chairman and Managing Director of Umiya Buildcon Ltd, called the GST rationalisation a landmark for the construction industry. He explained that simplifying slabs on key inputs like cement, steel, and paints will reduce pricing inefficiencies, improve procurement, and ease cash flow pressures. Mehta added that even a modest reduction in input costs can enhance project timelines and viability, particularly for affordable and mid-income housing. He emphasized that a transparent GST framework can increase investor confidence, support sustainable building practices, and drive capital inflows, benefiting both homebuyers and the sector overall.
Harsh Jagwani, Managing Director of Notandas Realty, observed that the reforms come at an important time for India. He highlighted that reducing GST on cement from 28% to 18% will benefit residential, commercial, and infrastructure projects. Cuts in rates for marble and travertine blocks, granite blocks, sand-lime blocks, and stone inlay works will further lower construction costs and budgets. Jagwani also pointed out that these changes will particularly benefit mid-premium and luxury residential segments. Combined with stable repo rates, the reforms are expected to boost sales during the festive season by enhancing consumers' purchasing power.
Industry experts agree that the GST rationalisation could strengthen the real estate sector by lowering construction costs, improving liquidity, and encouraging new projects. The move is likely to positively impact homebuyers, developers, and investors, while also supporting job creation in construction and allied industries. While transitioning to the new framework may require adjustments, the overall outlook for the sector is optimistic, with the potential for sustained growth and improved affordability in housing.
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