The introduction of GST 2.0 on September 4th, 2025, with a simplified two-slab structure of 5% and 18%, has drawn broad support from India’s real estate sector. The key highlight is the reduction of GST on cement from 28% to 18%, and on materials like granite and sand-lime bricks to 5%. These revisions are expected to ease cost pressures on developers, improve project feasibility, and strengthen affordability in housing, particularly in the mid and affordable segments.
Industry leaders also note that GST 2.0 brings policy amendments aimed at faster registration, quicker refunds, and clarity on discount adjustments, which streamline compliance and benefit contractors and suppliers. While luxury housing remains unaffected by direct tax changes, reduced input costs are likely to improve efficiency across the value chain. The timing, just before the festive season, is also seen as a boost for consumer sentiment and housing demand.
Expert Opinions
Mr. Samir Jasuja, Founder & CEO, PropEquity
“The rationalisation of GST rates by the government is a welcome move towards reducing compliance and thereby ease of doing business in the country. The reduction in rates across a host of items will give a spur to consumption, savings and investment by households, in turn enabling them to reduce their EMI burdens. This coupled with falling home loan rates will bring the much-needed cheer in the upcoming festive season and beyond. The overall impact of this move will translate into higher GST collections, more government spending and higher economic growth.”
Mr. Parag M Munot, MD, Kalpataru Ltd.
“GST 2.0 is a welcome step towards rationalization and greater clarity on the tax structure. What excites us more are the policy amendments around faster GST registration, refunds, and clarity on discount adjustments — these ease compliance issues down the value chain, especially benefiting our contractors, suppliers, and partners. A smoother operational ecosystem ultimately supports timely delivery and better customer experience in the housing segment.
For luxury housing, the works contract tax structure remains unchanged, so there is no additional cost implication for premium projects — which ensures stability for both developers and discerning homebuyers. The real impact we see is indirect: reduced rates on critical construction materials such as cement and bricks can lower procurement costs across the supply chain. In sum, GST 2.0 reinforces predictability while keeping the luxury real estate space insulated from sharp tax volatility.”
Ms. Shraddha Kedia-Agarwal, Director, Transcon Developers
“This rationalization of GST is a milestone decision that eases cost burdens for developers and promises relief for homebuyers. With construction costs shrinking, there’s scope to reimagine offerings—perhaps through more thoughtfully priced units or upgraded amenities that maintain affordability. Crucially, the simplification assures buyers about transparency in overall tax burdens, which can restore trust and strengthen market sentiment.”
Mr. Vikas Jain, CEO, Labdhi Lifestyle & President, NAREDCO Maharashtra NextGen
“The GST rationalization is a landmark move by the Government. The reduction in GST on construction materials will help ease the cost pressures on developers, especially in affordable and mid-segment housing. Simplifying tax slabs also brings much-needed clarity and predictability—essential for innovation in design, sustainable developments, and faster deliveries. If suppliers pass on these savings, homebuyers stand to benefit considerably.”
Ms. Karishmah Siingh, President - Sales, Marketing & CRM, Sattva Group
“This GST reduction on cement represents a pivotal reform that fundamentally shifts the affordability equation for Indian homebuyers. With ₹12-15 per square foot in direct savings, builders now have the flexibility to pass on meaningful cost reductions to end consumers, making homeownership a realistic aspiration rather than a distant dream. What’s particularly compelling is how this creates a virtuous cycle: as construction costs become more manageable, developers can price their projects more competitively, which in turn encourages fence-sitting buyers to move from aspiration to action. The immediate market enthusiasm reflects a broader confidence that we’re entering a phase where homebuying decisions will be driven by genuine affordability rather than constrained by inflated input costs. This reform essentially removes a major psychological barrier for homebuyers who have been waiting for the right moment to invest in their future.”
Mr. Prashant Sharma, President, NAREDCO Maharashtra
“NAREDCO Maharashtra welcomes the GST slab rationalization rolled out effective September 22, 2025. Bringing essential construction materials—particularly cement—from 28% down to 18%, and materials like granite and sand-lime bricks to 5%, delivers significant cost relief across the construction value chain. This reduction eases input costs, improves project feasibility, and allows developers to pass savings on to homebuyers—especially in the affordable housing segment. Announced during the festive season, this move not only uplifts consumer sentiment but also aligns with the Government’s 'Housing for All' mission.”
Mr. Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory
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