GST New Slabs to boost Real Estate ahead of the Festive Season

With the two-slab theory in place, GST relief on construction material is a boost for Indian real estate ahead of the festive season. According to experts, the new GST slab 2025 defines 3% to 5% cut on cement and other construction materials. Thus, homebuyers can expect a slowdown in property prices.

The new GST rate list 2025 has dissolved the earlier five-slab GST reform. From now on, only the 5% and 18% GST slabs are in effect. While the 40% slab remains for luxury items.

The decision to bring construction material under 5% cut will strengthen homebuying sentiment and investors’ confidence. The affordable housing in India is likely to be hit positively by the GST reform 2025. Tier II and Tier III cities in India are likely to witness massive business, especially in the residential segment.

The Union Finance Minister, Nirmala Sitharaman, announced the restructuring of GST slabs. The GST new rates effective date is 22nd September, the first day of Navratri 2025.

According to the report published in Hindustan Times, the declining affordable housing figure will rise if the benefit is passed to homebuyers. In 2019, the affordable housing category (under Rs. 40 lakh) witnessed a share of total sales of 38% to only 18% in 2024.

CREDAI-MCHI, a Government-recognised body for private sector developers in Mumbai Metropolitan Region (MMR), consistently works to make the sector more organised and progressive expresses happiness on the decision of GST reform.

The apex body said that GST relief on construction materials like cement (28% to 18%) and sand-lime bricks/stone inlay work (12%-5%) will bring relief to developers. However, the impact is ascertain as developers buy material in bulk from vendors, and they are already eligible for input tax credits.

Sukhraj Nahar, President, CREDAI-MICHI said, “CREDAI-MICHI welcomes the Government’s initiative to rationalise GST rates on key construction inputs like cement and sand-lime bricks. While the cost relief to developers and homebuyers is modest at this stage, this is a step in the right direction towards improving affordability and enhancing housing demand in MMR.”

“We remain hopeful that the Government will soon address the industry’s long-standing request to retain the 1% GST slab on affordable housing while rationalising the 45 lakh price cap, a reform that can significantly accelerate ‘Housing for All’ by 2030.”

CREDAI-MICHI further said, “We await clarity from the Government on affordable housing benefits, which remain critical for driving first-time homeownership in MMR.”