The GST Council’s decision to rationalise tax rates on construction materials is expected to provide significant relief to the real estate sector.
The biggest move is the reduction of cement’s tax rate from 28% to 18%, which will lower overall construction costs by 3–3.5%.
Since cement accounts for nearly a quarter of raw material expenses, this cut will improve developer margins and reduce project costs, offering scope for more affordable housing.
Apart from cement, tax on materials like marble, travertine blocks, granite and sand lime bricks has been reduced from 12% to 5%. This will especially benefit mid-range and premium projects where such materials are used extensively.
Together, these reforms could bring down overall construction costs by 3.5–4.5%, enhancing project viability and potentially making homes more affordable for buyers if benefits are shared.
While rates on steel remain unchanged, the revised taxes on other inputs add further savings.
Importantly, GST rates on affordable housing (1%), under-construction properties (5%) and completed properties (exempt) remain stable, ensuring no disruption in property taxation.
