GST Cuts on Building Materials Could Boost Housing Affordability

This festive season may bring fresh optimism for homebuyers, as the GST Council has announced sweeping reductions in tax rates on construction essentials such as cement, granite, and marble. While developers are unlikely to slash prices overnight, experts believe the move could ease project costs and gradually translate into savings for buyers.

Immediate Impact vs Long-Term Benefits

For projects already in advanced construction stages, where materials have been procured, buyers should expect festive discounts, flexible payment plans, or customised deals rather than price cuts. However, for new launches, reduced GST on materials will soon lower procurement costs, paving the way for competitive pricing in upcoming projects.

What GST 2.0 Brings

Cement and ready-mix concrete: 18% (down from 28%)
Bricks, tiles, and sand: 5% (down from 18%)
Paints and varnishes: 18% (down from 28%)

According to Anurag Mathur, CEO of Savills India, these changes will reduce the overall GST burden by nearly 20%, directly benefiting affordable and mid-segment housing.

Savings for Buyers

A reduction in GST on cement alone could cut construction costs by 3–5% for developers, translating into 1–1.5% savings for buyers. For the ₹50 lakh–₹1 crore housing segment, this could mean savings of ₹1–₹3 lakh—enough to lower upfront payments or reduce loan requirements. Sam Chopra eXp Realty India explained that even modest savings can make a big difference for first-time or mid-income buyers during festive season offers.

Developers’ Perspective

Industry leaders such as Vishal Tony Vincent of Aratt Developers and Mohit Goel of Omaxe agree that the benefit will flow more strongly into new projects, where fresh procurement cycles are underway. They anticipate overall construction costs easing by 2–4%, creating more competitive pricing in the coming years.

Will Homebuyers Benefit Now?

Experts caution that immediate price drops are unlikely. Ashish Kukreja of Homesfy suggested that developers will use festive season strategies like discounts and personalised offers to attract buyers rather than cutting base prices.

Market Dynamics and Transparency

The competitive nature of the market ensures that once a developer begins passing on GST benefits, others are likely to follow. With RERA regulations and consumer forums enhancing transparency, brokers and channel partners also act as watchdogs, ensuring that benefits are not withheld from buyers.

What Buyers Should Do

Focus on new project launches and mid-segment housing for quicker benefits.
Look out for festive season discounts or flexible payment plans.
Consult brokers and legal advisors to verify compliance.
Combine GST savings with lower loan rates to optimise affordability.

The Road Ahead

GST 2.0 has set the stage for long-term affordability in Indian housing. While immediate relief may come through festive offers, the real advantage lies in new projects and the broader mid-income segment, where even small savings enhance homeownership possibilities.