The Goods and Services Tax (GST) Council’s decision to introduce a simplified two-slab structure—5 per cent and 18 per cent—while slashing rates on key construction materials such as cement, granite, and marble is being hailed as one of the most progressive reforms for Indian real estate in recent years. Effective from 22 September 2025, the changes cut cement GST from 28 per cent to 18 per cent, while marble and granite blocks fall from 12 per cent to 5 per cent.
According to Anarock Research, construction cost savings could range between 3–5 per cent, especially significant in the affordable and mid-segment housing categories where margins are thin. The move is expected to ease compliance, improve project viability, and encourage both developers and homebuyers amid a festive season already buoyed by stable interest rates and growing demand.
Below, leading developers, analysts, and real estate executives share their perspectives on the impact of the reform.
Developers Welcome Cost Relief
Mohit Goel, Managing Director, Omaxe said, “The introduction of a two-slab GST structure is a timely reform that we wholeheartedly welcome. By reducing rates on key inputs like cement, granite and marble, the government has eased cost pressures in construction and simplified compliance, improving affordability for homebuyers, especially in the under-construction segment. This reform comes at an important moment with stable interest rates, strong festive sentiment and rising demand for quality housing shaping a positive outlook. At Omaxe, we see it as an opportunity to accelerate our vision of creating sustainable, community-centric developments in metros and high-growth tier-2 markets such as Chandigarh, Lucknow, Indore and Bhopal. This balanced approach to taxation will not only benefit homebuyers but also strengthen the broader housing ecosystem, driving investment, employment, and confidence across Bharat’s growing cities.”
Adding to this sentiment, Aditya Kushwaha, CEO and Director, Axis Ecorp said, “The GST reduction on key construction materials like marble, granite and cement is a timely boost for the sector. Lower input costs will help developers create better-designed, high-quality homes while keeping projects viable. For markets such as Goa, where interest in second homes and holiday villas is accelerating, especially among NRIs, this move supports sustainable growth and makes lifestyle-oriented real estate a more compelling investment story. It also strengthens the long-term case for creating thoughtfully planned holiday homes that balance affordability, premium design and strong rental potential.”
Amrita Gupta, Director, Manglam Group commented, “The festive quarter has always been a natural catalyst for homebuying and this year the backdrop is even stronger. The GST Council’s recent cuts, from 12 per cent to 5 per cent on marble and granite blocks and 28 per cent to 18 per cent on key cements, signal softer input costs and help ease pressure on future pricing. For buyers it reinforces confidence that affordability can hold, and for organised players it enables faster procurement and better value creation. In tier-2 markets like Jaipur we have experienced that families demanding lifestyle-focused homes and aligning purchase decisions with auspicious dates. Mid-segment and lifestyle housing remains the clear focus and are drawing the strongest traction. With banks rolling out festive loan schemes, sentiment and structural tailwinds are coming together to keep momentum strong.”
Akash Kohli, Founder & CEO, Elante Group added, “The GST rate cut on cement and construction materials is truly a Diwali gift for the real estate sector. A 10 per cent reduction will significantly lower construction costs, enabling us to pass on nearly 60 per cent of the savings to homebuyers. This festive boost will enhance affordability, accelerate demand, and brighten housing dreams for many families. This move will also boost the Indian economy and help build a New Bharat.”
Strong Impact on Affordable and Mid-Segment Housing
Manju Yagnik, Vice Chairperson, Nahar Group & Senior VP, Naredco Maharashtra stated, “The GST Council’s decision to slash the tax on cement from 28 per cent to 18 per cent is a transformative reform for the real estate and infrastructure sectors. Cement, being one of the most vital and cost-intensive inputs in construction, directly influences the viability and affordability of housing projects. This rationalisation will significantly ease input costs, improve financial feasibility for developers, and most importantly, make homes more affordable for buyers. The impact will be especially pronounced in the mid-income and affordable housing segments, where price sensitivity is highest and demand continues to surge. The reductions on other essential building materials such as marble, granite, and bricks further strengthen this move, allowing developers to accelerate launches, ensure timely project completions, and pass on benefits to homebuyers.”
For Parvinder Singh, CEO, Trident Realty, the shift to a streamlined GST structure is an impactful reform for India’s real estate sector. “With rates on key materials like cement now lower, construction becomes more cost-efficient, giving developers room to build smarter with greater flexibility in pricing. This simplification enhances cost transparency, reduces tax inefficiencies, and offers a more stable environment for long-term planning. For homebuyers, the impact is twofold with greater affordability, and a noticeable uplift in overall value.”
Karishmah Siingh, President – Sales, Marketing & CRM, Sattva Group commented, “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… removing a major psychological barrier for homebuyers who have been waiting for the right moment to invest in their future.”
Jetaish Gupta, Founder & Director, Adore Group said, “Today’s announcement to slash GST on cement from 28 per cent to 18 per cent is an enabling gesture for real estate. As one of the largest input costs is reduced, the reform enables builders to deliver affordable homes and expedite project timelines. For homebuyers, the tiered system of GST will ensure price points are more affordable, and India’s housing dream will get a new lease of life.”
L.C. Mittal, Director, Motia Builders Group commented, “With the GST slab being rationalized for construction materials, developers will focus on innovation and value rather than just costs. The primary beneficiaries will be affordable and mid-segment housing categories, ensuring quality housing is accessible to families in urban and semi-urban areas.”
Annuj Goel, Chairman, Goel Ganga Developments said, “This is a double bonanza for home buyers, with cheaper houses leading to lower GST. For builders and construction companies, this landmark reform enables effective construction and affordable housing. Savings can be directed to unique amenities and eco-friendly designs, making property ownership attractive and accessible.”
Nakul Bajaj, Managing Director, MNB Buildfab added similar sentiments. “The reduction of GST on cement from 28 per cent to 18 per cent is a landmark move that will have a cascading positive effect across the real estate value chain. Cement is one of the most critical inputs in construction, and this rationalisation is expected to bring down overall project costs by 5–7 per cent, which is especially impactful for affordable and mid-income housing projects… this move brings us closer to the vision of ‘Housing for All’ by making homes more accessible.”
Murali Malayappan, Chairman & MD, Shriram Properties commented that GST cut on cement is a welcome step that will lower construction costs and make homeownership more accessible. “It will particularly benefit the mid-market and mid-premium housing segments, where demand is strong and affordability is critical. This reform supports the Prime Minister’s vision of ‘Housing for All’ and will boost demand, innovation, and investment in the sector. At Shriram Properties, we see this as a catalyst for growth that will benefit homebuyers and the economy alike.”
Commercial Real Estate & Infrastructure
S.K. Sayal, MD & CEO, Bharti Real Estate too hailed the decision. “The government’s decision to decrease GST rates is a timely intervention for the real estate sector. Developers will be able to more effectively manage construction costs and provide greater stability for project execution as a result of the reduction in the tax burden on critical inputs, such as cement, from 28 per cent to 18 per cent. The reform will further encourage investment and enable us to deliver world-class infrastructure at a more competitive value for large business ecosystems such as our marquee development, Worldmark, which aims to contribute 17 million sq ft of exceptional commercial real estate to the country.”
Viren Mehta, Founder & Director, ElitePro Infra added, “The new GST reforms are a major step towards a more structured and transparent tax regime. For the luxury residential segment, the introduction of a 40 per cent GST slab for high-end inputs like high-end fittings, imported materials, and specialised services does raise cost considerations… yet this also presents a chance for the industry to transform. Builders will now have to react with more differentiated, cutting-edge offerings that emphasise thoughtful design, quality construction, and effective cost control.”
Sandeep Aggarwal, Chairperson & MD, AIL Developer stated, “Recently, the GST council’s decision to streamline all the taxes to 5 per cent–18 per cent is a great move… However, the suggested 40 per cent GST on certain high-end imported fittings and interiors for luxury projects is a cause of concern. Although these products account for a smaller percentage of overall project cost, they form an integral part of luxury housing… Overall, the reform is a welcome step in the right direction, and with supportive measures such as simplified approvals and affordable financing, it can be made to mean significant value for developers as well as homebuyers.”
Abhishek Raj, Founder & CEO, Jenika Ventures said, “The Next-Gen GST is a welcome step towards transparency and ease of business in real estate. Simplifying slabs to 5 per cent and 18 per cent will ease compliance, while lower GST on cement and steel improves project viability, especially for housing. However, the absence of input tax credit remains a major hurdle for developers, limiting the full benefits of this progressive reform.” Pawan Sharma, Managing Director, TRG Group added, The GST simplification is definitely a step in the right direction for the real estate sector. Merging the earlier 12 and 28 per cent slabs into a simpler 5 and 18 per cent structure streamlines compliance and brings more transparency to taxation, benefitting developers as well as buyers.”
Analysts and Market Experts Speak
According to Anuj Puri, Chairman, Anarock Group, “The forthcoming GST changes, which will go into effect from September 22, 2025, will have a positive impact on the Indian residential, retail, and office real estate sectors… Lower construction costs can reduce costs by 3–5 per cent. For affordable housing, this can boost demand in segments that have sharply declined in recent years.”
Ashish Agarwal, Director, AU Real Estate said “The move to rationalise GST slabs is a crucial development that brings much-needed clarity and simplicity to the real estate taxation system… This change is set to inject new energy into the real estate sector, paving the way for steady growth and reinforcing India’s stature as a vibrant housing market.”
Samir Jasuja, Founder & CEO, PropEquity commented, “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.”
Vimal Nadar, Senior Director & Head of Research, Colliers India added, “The newly announced two-slab GST structure of 5 per cent and 18 per cent is a progressive move to rationalise the prevailing inverted duty structure… The slashing of GST on cement will play a critical role in rehauling project cost structures. The timing of this rollout is appropriate, with the festive season in the offing and the real estate sector already reaping the benefits of favourable interest rates.”
According to Piyush Bothra, Co-Founder & CFO, Square Yards, “The latest GST restructuring comes as a major boost for the real estate sector. With the reduction in costs of key construction materials such as cement and steel, input expenses for developers are expected to ease, making projects more viable. For the residential segment, this is likely to translate into tangible benefits for homebuyers as developers pass on the savings.”
Shrinivas Rao, FRICS, CEO, Vestian said, “The recent reduction in GST rates is poised to strengthen the real estate sector by reshaping demand–supply dynamics. Lower GST on construction materials is expected to enhance housing affordability by reducing input costs, while reduced GST on other goods could improve disposable income, thereby stimulating real estate demand.”